Digital economy taxation

Brief summary

Digitalisation is changing the economy and many business models. Consequently, the Organisation for Economic Co-operation and Development (OECD) is preparing proposals as to how the taxation of the profits of internationally active companies can be adapted to the new developments in the longer term.


The OECD's programme of work proposes solutions based on two pillars:

  • Pillar 1: Modification of the profit allocation mechanism and the nexus rules for establishing tax liability. In concrete terms, a higher share of consolidated profits should be allocated to market jurisdictions for taxation. Under the new rules, consolidated profits would also be taxed in jurisdictions where the company has no physical market presence, leading to a shift in tax receipts from large groups' states of domicile to market jurisdictions. The OECD's technical working parties are elaborating the details.

  • Pillar 2: Minimum taxation rule. In concrete terms, using as yet undefined measures, a minimum tax rate for groups should be ensured. The OECD's technical working parties are elaborating the numerous technical details. No decision will be made on the level of this rate until the technical details have been clarified.

Switzerland is involved in this OECD work. The country prefers long-term, broad-based multilateral solutions rather than a multitude of confusing national measures. It is committed to tax sovereignty and fair tax competition, and considers that a binding minimum tax level generally hampers innovation and growth. Any minimum tax recommendations at international level must be moderate.

Further information on the topic can be found on the website of the State Secretariat for International Finance SIF.

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Last modification 29.09.2020

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