Tue, May 21, 2019 - Page 10 News List

Swiss voters give green light for tax overhaul

Reuters, ZURICH, Switzerland

Voters in Switzerland on Sunday approved a shake-up of the corporate tax system, heading off what Swiss Minister of Finance Ueli Maurer had called an existential threat to the nation’s role as a business hub.

Provisional results with all votes counted showed that the measure passed in the binding referendum by a 66-34 percent margin.

The vote on tax reform and pension finance defuses a long-running row over favorable Swiss tax rates for multinational corporations.

Acceptance was vital to prevent the country being branded a low-tax pariah, Maurer has said.

Two years ago, under the Swiss system of direct democracy, voters rejected an attempt to overhaul the tax system, which critics say gives the country an unfair advantage in attracting global companies.

Under pressure from the EU and the Organisation for Economic Co-operation and Development, the nation had promised to meet international standards and eliminate special low tax rates that benefit about 24,000 foreign companies based in Switzerland.

The Swiss government plans to scrap special tax status for these companies, which pay corporate rates in individual cantons as low as 7.8 percent to 12 percent, compared with 12 percent to 24 percent for “normal” Swiss companies.

Cantons in turn are to lower their tax rates for normal companies to deter them from leaving.

To cover the resulting revenue shortfall of about 2 billion Swiss francs (US$1.98 billion), the federal government is to increase the share of federal tax that cantons get.

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