Switzerland: Approval of global minimum tax for large multinational enterprises
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Switzerland has taken a significant step in adopting global tax reforms for large multinational enterprise (MNE) groups, aligning with the OECD/G20 initiative aimed at addressing taxation challenges in the digital economy. Federal Decree No. RO 2023 482, recently published in the Swiss Official Gazette on September 4, authorizes the implementation of this global minimum tax.
The decree encompasses the following key provisions:
Amendment to the federal constitution to grant authority for the introduction of a minimum tax applicable to large corporate groups. The Federal Council is also empowered to establish transitional provisions in advance of the tax’s implementation.
Specification of the transitional provision’s scope, including the potential imposition of an additional top-up tax on constituent entities of MNEs with a consolidated annual turnover exceeding 750 million euros (approximately US$804.4 million).
Stipulation that the top-up tax becomes applicable when the combined tax liabilities of constituent entities in Switzerland or other tax jurisdictions fall below the minimum tax rate of 15 percent.
Provision for specific circumstances where the tax is deductible.
Definition of calculation procedures for determining the tax liability.
Authorization for the imposition of penalties in cases of noncompliance.
This decree is slated to come into effect on January 1, 2024, marking Switzerland’s commitment to international efforts aimed at creating a more equitable global tax framework for large MNE groups.