Statement – Swiss Corporate Tax Reform III rejected
ZURICH, 12 FEBRUARY 2017 – Swiss voters rejected the proposal in the popular vote held on 12 February 2017.
On 17 June 2016, the Swiss Parliament approved the final bill on Corporate Tax Reform III (CTR III). A referendum was called by the Social Democratic Party (SP) and the proposal was subject to a popular vote. On 12 February 2017, the Swiss electorate rejected CTR III.
During the referendum campaign, opponents of the tax reform criticized in particular the introduction of the notional interest deduction on surplus equity and the partial taxation of dividend income for individuals. Concerns around the expected tax revenue shortfall, which – according to the opponents – eventually would be borne by the Swiss population, were decisive for the rejection of the reform.
“Regretfully, the rejection of CTR III will delay the alignment of the Swiss corporate tax system with the latest international taxation standards”, says Daniel Gentsch, Managing Partner Tax, EY Switzerland. “The maintenance of the status quo is not a long-term option since companies subject to a preferential tax regime in Switzerland would otherwise potentially face countermeasures in the future from other countries due to non-compliance with international standards.”
“In order to restore the international acceptance of the Swiss corporate tax system and to foster a competitive environment for companies in the future, it is critical that a revised tax reform package be prepared and implemented by the Swiss legislator as soon as possible,” adds Daniel Gentsch.
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