The Swiss people today authorized the Federal Council to introduce the OECD/G20 minimum taxation in Switzerland.

On June 18, 2023, the Swiss people approved a constitutional amendment that enables the Federal Council to introduce, on the basis of a temporary ordinance, the global OECD/G20 minimum taxation with a so-called Effective Tax Rate (ETR) of 15 percent for multinational groups with a consolidated annual turnover of 750 million euros or more in Switzerland. All other companies are not affected by this reform.

The Federal Council will adopt the OECD/G20 model rules by means of a static reference. The model rules are also to be interpreted in accordance with the associated OECD/G20 commentary and guidance. A federal law will subsequently be enacted in the ordinary procedure. While the Federal Council is authorized to introduce the minimum taxation as early as effective January 1, 2024, it is expected that Switzerland will likely follow the EU timetable, to the extent the latter caters for effectiveness in the EU member states at a later date. Separately, the minimum taxation already has a retroactive effect, as the transitional rules already apply to certain transactions on or after November 30, 2021.

Companies to which the new regime applies will be subject to comprehensive documentation and declaration obligations. The cantons will be responsible for assessing and levying the minimum tax. A so-called one-stop-shop is planned: The canton in which the economically most significant unit of the group is domiciled is tasked with levying the minimum tax for all units in Switzerland. For interpretive questions arising as part of the implementation, the cantons may turn to a working group consisting of representatives of the cantonal tax administrations and the FTA. Affected companies can check specific questions of interpretation with their competent canton.

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