Switzerland prepares to vote on global minimum tax - Tax and Legal blog


As countries across the world continue with their efforts to implement the OECD’s global minimum tax (Pillar Two, or GloBE Rules) into domestic law, we see Switzerland is continuing to lay the groundwork for the nation to adopt the rules.

The Swiss implementation journey began in June 2022 with the release of their roadmap to adopt the GloBE Rules. The roadmap intends to apply the income inclusion rule (IIR) and qualified domestic minimum top-up tax (Q/DMTT) as of 1 January 2024.

A referendum is scheduled on 18 June 2023, providing the federal government with the authority to continue with the implementation. As Switzerland continues to move forward, it is crucial for in-scope groups located in Switzerland to understand the financial reporting, disclosure and compliance requirements that are on the horizon. This leaves companies with the short time frame to assess the implications of the rules on the organizations.

Transitional CbCR (Country-by-Country Reporting) safe harbour rules

As outlined in our blog post in December, OECD Pillar Two: Information return and safe harbors published - Tax and Legal blog (deloitte.ch), the OECD has published transitional safe harbour rules that could potentially provide in-scope groups with compliance relief.

The transitional safe harbour rules are to be calculated based on “Qualified” CbCR data, which may require organizations to evaluate their CbCR process to ensure alignment with the GloBE Rules. The three tests are:

  • A de minimis test – less than €10 million (approximately $11 million) qualified CbCR revenue, and less than €1 million qualified CbCR profit (loss);
  • A simplified effective tax rate (ETR) test – simplified covered tax divided by qualified CbCR profit (loss) greater than 15% (16% in 2025, 17% in 2026); and
  • A routine profit test – substance-based income exclusion greater than qualified CbCR profit (loss).

Practical implications

The first hurdle in completing the assessment is determining if the CbCR data is considered “Qualified”. Swiss federal law does not define “Qualified” CbCR, therefore the term “Qualified”CbCR is derived from the guidance issued by the OECD on the transitional CbCR safe harbour, with consideration for the following:

  • The financial information for the “Qualfied” CbCR should generally be sourced from qualified financial statements, which for a Swiss group, would include: IFRS, US GAAP or Swiss GAAP FER.
  • For purposes of the simplified ETR test, the simplified covered tax component is equal to the current year tax expense, plus deferred tax expense (excluding any expenses related to uncertain tax positions).
  • For Swiss groups, attention should be given to the treatment of net-wealth taxes. Although recorded above the line under IAS 12, these taxes would be considered Covered Tax under GloBE, and possibly mapped to a Swiss CbCR, therefore a “Qualified” CbCR should consider net-wealth tax.

If none of the tests are met, then the full-scope GloBE calculations would need to be completed for the jurisdiction not meeting the safe harbour requirements. As soon as it is not possible to meet a safe harbour test, then the safe harbour option will no longer be available for the respective jurisdiction (‘once out, always out’).

It is recommended that in-scope groups review their CbCR procedures in 2023 and perform preliminary calculations to assess the applicability of the tests. It is also important to note that groups that are not in scope of Swiss CbCR (i.e., with a revenue below CHF 900 million) should consider adopting a voluntary CbCR in order to potentially qualify for the transitional safe harbours.

Domestic minimum top-up tax

Countries are introducing legislation to include a qualified domestic minimum top up tax (Q/DMTT). The OECD’s Administrative Guidance has provided that priority is given to the Q/DMTT over IIR and UTPR.

It is anticipated that Q/DMTT regimes will continue to be introduced, and attention should be given to assess if these regimes deviate from the GloBE Rules. Although the GloBE Rules have hoped to bring harmony across tax systems, there are several deviations based on the expanded definition of a Q/DMTT regime, notably:

  • Narrower scope: Jurisdictions may apply Q/DMTT to groups with a global revenue below the EUR 750 million threshold.
  • Tax allocation: The allocation principles of top-up taxes under a Q/DMTT may not align with the GloBE Rules. For example, the proposed allocation rules in Switzerland would require top-up taxes allocated to the ‘low-taxes’ Swiss constituent entities on a standalone basis.
  • Financial statement information: If the basis of the financial information in determining the Q/DMTT deviates from the GloBE Rules, this may introduce another layer of complexity and compliance burden.
  • Other deviations: Under a Q/DMTT there is no requirement for a substance-based income exclusion. Also, Q/DMTT Regimes could provide a narrowing definition of Covered Taxes.

As the Swiss domestic headline tax rate is below the global minimum rate of 15%, a Q/DMTT is expected to be implemented, aligning with the GloBE Rules. Therefore, in scope entities should expect an additional layer of tax computations and increased compliance requirements.

Understanding new compliance obligations

While the transitional CbCR safe harbours may provide groups with temporary relief in managing the significant new compliance obligations under the GloBE Rules. The permanent safe harbour solution remains unknown.

With the international tax landscape rapidly transforming, it is important for organizations to prepare their operations to adapt to the new environment.

Adapt your organization 

The data requirements for the transitional CbCR safe harbour analysis are significantly lower. In scope groups should be taking the steps to understand their risks and establish a plan to address the upcoming reporting, disclosure and compliance requirements which will be influenced by the number of jurisdictions that do not meet any of the transitional CbCR safe harbour tests.  


This blog has been adapted from Deloitte Switzerland’s recent post in International Tax Review, dated 19 April 2023.  

Key contacts

Blog_Daniel stutzmann110x110

Daniel Stutzmann - Partner, Global Minimum Tax  

Daniel is a tax partner with 17 years of experience as an international corporate tax specialist. He has extensive experience in the area of cross-border structuring (including establishing tax-efficient IP and financing structures) and business reorganisations, including large supply chain transformation projects. Daniel also has broad knowledge in tax accounting and tax reporting, both from an advisory and audit side. He is a specialist in the OECD pillar two legislation and its impact, and leads the Deloitte Switzerland pillar two team.

As a Swiss tax expert, Daniel has managed the Swiss tax compliance of hundreds of companies in Switzerland, from various industries. He is well acquainted with the Swiss tax authorities and has successfully led various tax audit and tax ruling negotiations with the Swiss tax authorities.


Manuel Angehrn110x110

Manuel Angehrn - Senior Manager, Global Minimum Tax  

Manuel is a Senior Manager with over 10 years of experience in International Tax. He is a Deloitte Switzerland’s Global Minimum Tax subject matter expert. He follows domestic and global tax developments and assesses the impact to Swiss multinationals.


Ryan-Peluso-DSCF3268 (002)_110

Ryan Peluso - Manager, Global Minimum Tax

Ryan is a Manager with over 7 years of experience in International Tax. He supports in modelling the impact of Pillar II as well as developing and executing processes for its implementation. He is specialised in helping clients access, visualise and analyse their data for international tax reporting, compliance and planning processes.



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