World Economy
0

Swiss Voters Reject Corporate Tax Reform

SRF said voters appeared to have rejected the tax plans by about 60% to 40%.SRF said voters appeared to have rejected the tax plans by about 60% to 40%.

Swiss voters have clearly rejected plans to overhaul the corporate tax system, in a setback for government efforts to abolish low tax rates for thousands of multinational firms while encouraging them to stay, projections by broadcaster SRF showed.

Most Swiss recognize the country needs tax reform to avoid being blacklisted as a low-tax pariah. But new measures proposed to help companies offset the loss of their special status breaks had created deep divisions, Reuters reported.

“It is so clear that you can already say the measure will fail,” political analyst Claude Longchamp of the gfs.bern research and polling institute told SRF around half an hour after polls closed. SRF said voters appeared to have rejected the tax plans by about 60% to 40%.

Switzerland has been in the European Union’s firing line for years because cantons (states) have a special tax status for foreign companies that means some pay virtually no tax other than an effective federal tax of 7.8%.

The country agreed with Brussels in 2014 to abolish this status because it allowed some foreign firms to pay far lower tax on overseas earnings—an attractive perk for around 24,000 multinationals looking to lower their tax bills.

To offset the introduction of higher tax rates the government also proposed giving companies tax breaks on research and development in Switzerland, profits from patents developed there and deductions for excess company equity.

In addition, many cantons say they would also reduce corporate tax rates for all companies to reduce the fiscal burden and dissuade multinationals from leaving.

 

Add new comment

Read our comment policy before posting your viewpoints

Financialtribune.com