Corporate Tax in Tax and Legal blog
Global Minimum Tax: Swiss voters pave the way for implementation in 2024
In the popular vote on 18 June 2023, Swiss voters approved the most extensive change to the Swiss corporate tax system in over a century with a wide majority. With the amendment of the Swiss constitution the Swiss voters have paved the way for the Swiss legislator to introduce the global minimum tax (also referred to as “Pillar II”) in Switzerland.
Pillar II introduces an additional layer of taxation (tax law) to Swiss constituent entities of multinational enterprises in scope of the rules and introduces a corporate group taxation system in Switzerland with a mandatory tax of 15% that is determined under a new tax basis (“GloBE”).
The magnitude of change is significant and will redefine the Swiss corporate tax environment in the years to come.
Potential abolishment of the Geneva Municipal Business Tax and increase of the income tax rate
Created at the end of the 18th century, the Municipal Business Tax (“MBT”) (Taxe Professionnelle Communale) is only levied by the municipalities of the canton of Geneva and covers the gainful commercial activity of legal entities and individuals carried on in the canton.
Switzerland prepares to vote on global minimum tax
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.
Join our insightful breakfast on developments in US inbound investments in Zurich, 10 May 2023
Join our OECD Pillar II tax accounting seminar in Geneva, 9 - 11 May 2023
We would like to invite you to our OECD Pillar II/GloBE Tax Accounting seminar from Tuesday 9 to Thursday 11 May 2023 in the Deloitte office in Geneva. Over this three half-day workshop series (1pm to 6pm), our team of local tax accounting and Pillar II experts will provide an interactive training taking you from the basics of tax accounting to understanding key considerations of Pillar II.
OECD releases Pillar Two Administrative Guidance
On 2 February 2023, the OECD/G20 Inclusive Framework on BEPS (inclusive framework) released a package of technical and administrative guidance (“administrative guidance”) related to the 15% global minimum tax on multinational corporations known as Pillar Two (or the global anti-base erosion (“GloBE”) rules). The guidance was agreed by consensus of all 142 countries and jurisdictions in the OECD/G20 inclusive framework and forms part of the “common approach.” Under the common approach, countries are not required to adopt the GloBE rules but, if they choose to do so, they agree to implement and administer the rules in a way that is consistent with the outcomes provided for under the Pillar Two model rules and any subsequent guidance agreed by the inclusive framework.
Deloitte Finance Day 2023 - The colours of finance - design your future capability - 1 June 2023 in Zurich
Higher attention to Country-by-Country Reporting going forward
Recent developments, such as the acceleration of the public Country-by-Country Reporting (“CbCR”) obligations by Romania, as well the newly published guidance regarding Pillar II safe harbour rules, have put increasing pressure and scrutiny on Multinational Enterprises’ (“MNEs”) CbCR obligations and will directly affect companies’ tax compliance obligations.
Join our OECD Pillar II webinar on 15 February 2023, 4.00pm
The implementation of the Global Minimum Tax (“OECD Pillar II”) experienced a significant push towards reality in late December 2022, which included:
- The European Union adopting the directive requiring members to transpose it into domestic legislation
- Switzerland completing the parliamentary process on its change of constitution
- The OECD`s publishing a number of papers to guide the GloBE implementation (in particular: safe harbours, information return and tax certainty)
To navigate these developments we are organising a keynote webinar on Wednesday 15, February 2023 from 4.00 to 5.30pm to discuss these and other topics.
South Korea: First Country to pass the domestic Global Minimum Tax legislation
On 23 December 2022, the Korean National Assembly officially passed the 2022 Tax Revision Bill originally announced by the Ministry of Economy and Finance back in July 2022.
This is a pivotal moment in the advancement of the global minimum tax “Pillar Two” as South Korea is the first country to codify the GloBE Rules into domestic legislation. The newly passed law provides that a global minimum tax will be introduced from fiscal years beginning on or after 1 January 2024.