Switzerland has since more than 50 years some specific tax regimes for companies which aim to reduce the taxable basis of certain kind of businesses (see section special tax status) . Starting back in 2007, the EU tried to put pressure on Switzerland for the abolition of those regimes, pretending that they represented a harmful tax competition. To avoid being black-listed as an offshore jurisdiction, Switzerland decided to amend its legislation and abolish those status.
However such action can not happen without a compensation for the companies which benefit from those regimes, otherwise there is a high risk that some of them might leave Switzerland. The Swiss confederation and the cantons have therefore put many efforts over the last few years to come up with the Corporate tax reform III, a project of reform which shall abolish the special tax status and introduce additional measures which aim to maintain or even improve the tax attractiveness of Switzerland. A parallel effect of the reform but which is not directly part of the federal reform, is a global reduction of the standard corporate tax rate at the cantonal level. This measure is a cantonal decision but is taken by the cantons which traditionally had a high corporate tax rate, i.e. mainly the French speaking cantons. Their goal is to make sure that companies which will no more benefit from a special tax regime will still be taxed at an internationally attractive rate. The average standard corporate tax rate in Switzerland should therefore amount to 13% to 14% in a near future. The international trend goes in the same direction with reduction of corporate income tax rate.
For more information on the federal measures, how they work and their effect as well as the cantonal implementation of those measures, we invite you to go through our newsletters on this topic et to contact us for any questions.