- Switzerland drops 15% minimum business tax
- Minimum taxes supported by business groups
- Passage of the climate law, which was rejected in 2021
- Extension of the COVID-19 Act is approved
ZURICH (Reuters) – Swiss voters approved on Sunday the introduction of a global minimum corporate tax and climate law aimed at cutting fossil fuel use and getting to zero by 2050, the Swiss Broadcasting Corporation (SRF) reported.
The results showed that nearly 80% of those who voted in Sunday’s national referendum supported raising the country’s business tax to a global minimum of 15% from the current minimum average of 11%, an unusually strong support.
“This ensures that Switzerland will not lose any tax revenues to foreign countries,” said Finance Minister Karin Keller-Sutter. It will also create, moreover, a legal certainty and a stable framework.
Likewise, the climate law was approved and received the support of 59% of the electorate.
In 2021, Switzerland joined nearly 140 countries that have signed the Organization for Economic Co-operation and Development (OECD) agreement to establish a minimum tax rate for large corporations, a move aimed at curbing the practice of shifting profits to countries with lower taxes.
Even with the increase, Switzerland would still have one of the lowest levels of corporate taxes in the world. The proposal, which is estimated to bring in 2.5 billion Swiss francs ($2.80 billion) a year in additional revenue, has been supported by business groups, most of them political. parties and the public.
The climate law, which was brought back in an amended form after being rejected in 2021 as too costly, has sparked more controversy among those campaigning against it and has been gathering momentum in recent weeks.
Supporters of the law say the law is the minimum the wealthy country must do to prove its commitment to combating climate change, while opponents of the right-wing People’s Party say it would jeopardize energy security.
In Sunday’s referendum, voters also agreed to extend some provisions of the country’s COVID-19 emergency law, required under Switzerland’s system of direct democracy, in which legislation is put to a public vote.
Switzerland is home to the offices and headquarters of about 2,000 foreign companies, including Google (GOOGL.O) as well as 200 Swiss multinationals, such as Nestle (NESN.S). While everyone will be affected, business groups welcomed the greater certainty the new tax would bring, even if Switzerland loses some of its low-tax appeal.
“No other country would have lower taxes. We want the extra tax revenue to stay in the country, and be used to improve its attractiveness to businesses,” said Christian Frey of lobby group Economicswiss.
($1 = 0.8937 Swiss francs)
(Reporting by Noel Ellen, John Revell and Emma Farge) Written by Thomas Janowski and Noel Ellen; Editing by Frances Kerry, Hugh Lawson, Sharon Singleton and Giles Elgood
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