EU asks Switzerland to adopt a corporate tax reform

The European Council continues to insist on adopting by Switzerland the package of proposals for the introduction of a new corporate tax reform. This issue is one of the important keys in the economic relations between the EU and Switzerland.

In September 2018, the Federal Assembly of Switzerland approved the Federal Law “On Tax Reform and AHV Financing” (known as TRAF). This law repeals special agreements for companies with cantonal status, in accordance with which such companies pay only a reduced income tax or do not charge tax at all.

The European Council noted that they welcome the adoption of a new bill that “replaces some preferential tax regimes and practices constituting harmful tax competition for a new set of measures taken by the international community”.

The new law will also introduce a mandatory regime of patent boxes for all cantons, which is accompanied by additional deductions for research and development costs, which will be implemented on an optional basis. In addition, dividend taxation will also be reformed and revised.

The country's leadership hopes the new legislative initiatives to replace the package of tax reforms, which did not receive the support of the Swiss in a 2017referendum. In connection with the new law adoption, which relates to the international politics issues, the Swiss authorities have announced a referendum on the TRAF law, which will be held on May 19, 2019.

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