ey-global-tax-policy-outlook-for-2015

Switzerland
2.3 Tax policy outlook for 2015 — summary
Corporate income tax burden
Lower No change Higher
Personal income tax burden
VAT/GST/sales tax burden
X
X
Lower No change Higher
X
Lower No change Higher
2.4 Tax policy outlook for 2015 — detail
Corporate income taxes
• As a result of international developments, Swiss policies on
the granting of tax privileges in the cantons are under review.
Plans are to abolish the status of “domicile company,” to
adjust the cantonal holding privilege to meet international
standards and to introduce a minimum tax rate for holding
and mixed companies. In addition, foreign and domestic
income generated by mixed companies is to be treated
equally for tax purposes in order to satisfy EU calls for an end
to what is known as “ring-fencing.”
• In return, royalties should be taxed at a reduced rate at the
cantonal level by means of a royalty box, and an interest-
capital has been proposed. Adjustments are also to be
made to cantonal taxes on capital. Further measures under
discussion are the abolition of the issue tax on equity capital,
adjustments to participation deductions and the offsetting of
losses.
• The average cantonal corporate income tax rates could be
lowered from 22% (currently) to around 14%.
•
consultation on this proposal ends on 31 January 2015. Any
law changes will not be enacted before 2017.
Taxes on wages and employment
• Restrictions of lump-sum taxation of wealthy foreigners will
be enacted as of 2016 as a result of this tax model being
perceived as somewhat unfair. In that regard, the model has
come under international pressure. That said, an initiative to
completely abolish lump-sum taxation was dismissed by the
Swiss people in 2014.
Inheritance tax
• The Swiss Socialist Party successfully launched an initiative
general exemption threshold of CHF2 million for inheritance
and an exemption threshold of CHF20,000 per annum
for occasional gifts and donations. Spouses or registered
partners shall be exempt from the tax.
• A popular vote on this initiative will take place in 2015.
Today, there is no inheritance or gift tax at the federal level.
VAT, GST and sales taxes
• A reform of the Swiss VAT system was launched in 2014 and
could enter into force as early as January 2016. Most of the
proposed changes are of a technical nature. However, as a
consequence of the proposed broadening of the tax base,
more foreign businesses will have to register for Swiss VAT if
they do business in Switzerland.
176 | The outlook for global tax policy in 2015