Swiss Corporate Tax Reform III: how Switzerland will remain attractive

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On 5 June 2015, the Swiss Federal Council published Corporate Tax Reform III for debate in parliament. The legislation is designed to boost trust in Switzerland and strengthen its position as a tax domicile. If parliament reinstates the notional interest deduction, Switzerland will be able to retain its place among the most attractive locations for doing business.

Topics of this article

  • Reform project: background and current status

  • Important reform for Switzerland

  • The reforms in detail 

Read more here.

Summary

Dating back more than thirty years, the current rules on corporate taxation – particularly the tax regimes that are due to be abolished – have been a major factor in Switzerland’s success. Plans to do away with these rules have created a great deal of legal uncertainty, raising the question of how competitive Switzerland will remain in terms of attracting international businesses.

This uncertainty came to an end when the CTR III reform package was released for parliamentary debate on 5 June 2015. Provided that parliament re-adopts the notional interest deduction, the package will contain the reform elements necessary to ensure Switzerland remains among the most attractive tax jurisdictions for corporations.

Given that Swiss public finances are in relatively good shape by international standards and that the will exists on the part of parliamentarians and the general public to adopt and implement CTR III, Switzerland will be able to preserve its reputation as a reliable, long-term, business-friendly location and an attractive tax jurisdiction for international companies. The new corporate tax legislation will help ensure the continuing success of the Swiss model in the coming decades.

 

Published by

Armin Marti

Armin Marti
PwC
Birchstrasse 160
Postfach, 8050 Zurich
+41 58 792 43 43

Armin leads the PwC Swiss Corporate Tax practice. He holds a Master in Business Administration from the University of St. Gallen, Switzerland (lic. oec. HSG) and has qualified as a Swiss Certified Tax Expert.

As a member of the global PwC International Tax Services (ITS) Network and former country leader for ITS, Armin has gained extensive experience in leading complex cross-border tax projects.

Armin Marti has over 29 years experience in providing international tax consultancy for large quoted and privately held Swiss and foreign multinationals. He advises his clients on tax effective set-up of legal entity structures including domestic and cross-border tax restructurings, tax effective group financing, tax efficient profit repatriation, acquisitions and divestitures plus tax effective business models.