Federal Council details implementation of OECD/G20 minimum taxation

Bern, 24.05.2023 - The OECD/G20 minimum taxation for large multinational enterprises is to be implemented in Switzerland with a supplementary tax. On 18 June 2023, the Swiss electorate will vote on the requisite constitutional basis. If this basis is accepted, the Federal Council can temporarily introduce the supplementary tax by means of an ordinance. At its meeting on 24 May 2023, the Federal Council opened the second consultation procedure on this ordinance.

By amending the constitution, the Federal Council and Parliament want to make it possible for the OECD/G20 minimum taxation of 15% for large multinational enterprises to be implemented in Switzerland in a timely manner. In doing so, they want to secure stable framework conditions as well as jobs and tax receipts in Switzerland. The new constitutional provision, which will be put to the vote on 18 June 2023, gives the Federal Council the authority to temporarily introduce a supplementary tax to ensure this minimum taxation by means of an ordinance. Within six years, it must submit a law to Parliament that replaces the ordinance.

In an initial consultation on this so-called Minimum Taxation Ordinance, it was decided that the model regulations developed by the OECD/G20 should be adopted by means of a reference. This will ensure the international compatibility of the Swiss regulations. At its meeting on 24 May 2023, the Federal Council opened the consultation procedure on further provisions of the ordinance, which in particular clarify the tax procedure in Switzerland.

Levying of the supplementary tax

The Federal Council is planning a so-called one-stop shop for levying the new supplementary tax: the economically most important unit of a group of companies is to pay the tax in its home canton for all the units across Switzerland. The canton will transfer to the Confederation, and to those cantons that are home to other business units of the same group of companies, their share of the revenue from the supplementary tax. This concept was developed in cooperation with representatives of the cantonal tax administrations in order to minimise the administrative burden.

The supplementary tax is to be levied by the cantons within the framework of a mixed assessment procedure analogous to income tax. This means that the tax authorities will determine the tax and set it by means of a ruling. However, the taxable business units are obliged to cooperate by submitting a self-declaration.

The declaration and the procedure are to be completed electronically on a portal. The Federal Tax Administration (FTA) and the cantons concerned will have access to this portal. The appeal procedure provides for assessment appeals to be submitted directly to the Federal Administrative Court.

Outlook and international developments

The Minimum Taxation Ordinance is expected to enter into force on 1 January 2024, provided that the people and the cantons approve the constitutional amendment on 18 June 2023. Before making a final decision, the Federal Council will examine the implementation status in other countries. The Federal Council believes that the minimum taxation should enter into force at the same time as in the EU. This will ensure that Switzerland does not forgo any tax base in favour of other countries.

The consultation will last until 14 September 2023. The two draft ordinances will then be merged, taking into account the results of the consultation and any further technical requirements of the OECD/G20.

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