Switzerland aims to make tax system more competitive

Switzerland’s Federal Department of Finance is developing new tax rules designed to improve Switzerland’s attractiveness as a business location, Switzerland’s Federal Council announced February 4.

The tax proposals will be based on a report prepared by tax experts commissioned by the government, which was released alongside the Federal Council announcement. The proposals will be presented to the Federal Council in June for its review.  

The Swiss expert report identifies 16 areas of recommended action, several of which were specifically noted by the Swiss Federal Council in its announcement. 

To promote research and development, the expert report recommends an extension of Switzerland’s patent box to copyrights for software. The patent box could also be extended to cover ancillary rights to support companies that do not have patents on their innovative services or products, the report notes.

The expert report also recommends expanding relief limits for R&D, noting that more generous regulation of research and development assists companies with a high level of innovation. The enhanced benefits would increase Switzerland’s attractiveness as a location for mobile companies, the experts note.

The canton capital and wealth taxes should be reduced, the report states. “Cutting taxes that are detrimental to a company’s asset base strengthens the resilience of businesses, promotes investment and increases Switzerland’s appeal for well-capitalized companies,” the report argues.

Expanding loss offsetting is also recommended by the experts to strengthen businesses’ ability to take risks.

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