Switzerland plans subsidies to cover G7 corporate tax plan

Multinational companies based in Switzerland, such as Glencore, will receive subsidies and other incentives under the program. The new G7 program for the big business for the global minimum tax.

Bern consults with its cantonal governments, which set their corporate tax rates to look at how tools such as research grants, social security deductions, and tax credits can create a “toolkit” to compensate for any changes in key tax rates. officials told the Financial Times. ,

The suggested Swiss measures are: another sign of how difficult it is it can prove that the G7 is committed to the global corporate tax rate of 15%. For example, multinational companies based in the Swiss canton of Ug og currently have less than 12% local tax.

“Our clear goal is to make ug og one of the most lucrative, internationally accepted tax rates in the future,” finance minister Heinz Tunler told FT. “Our people have proven time and time again that they are aware of this. “The needs of international companies for favorable conditions.”

Despite a population of only 8.5 million, Switzerland is home to some of the world’s largest multinational companies, such as Nestlé, Novartis, Roche and ABB. At present, 18 of the 26 cantons in Switzerland currently charge less than the 15% minimum proposed by the G7.

The country has the strongest competence in the developed world for low corporate taxes. The economy is larger than all the low-tax countries in Europe: Ireland, Hungary, Bulgaria and Cyprus.

Swiss multinational companies like Glencore to receive subsidies to maintain competitive tax rates © Gianluca Colla / Bloomberg

The Economiesuisse, a body representing Swiss business, estimates that 250 companies operating in Switzerland could influence the new rules proposed by the G7.

“There are still a lot of questions about this deal,” said Christian Frey, deputy chief tax officer at Economisys. “But Switzerland will certainly suffer more than any other country.” He added. “Fortunately, there is something we can do. We are confident that we can compensate. ”

Many Swiss officials are reluctant to suggest that their country is a tax haven where companies simply set up their headquarters. tax arbitrationThey note that many multinational companies based in Switzerland are of Swiss origin and employ a significant local workforce.

Still, the G7 initiative, if fully accepted in the world, will be the rule of the last changes imposed on Switzerland by the international community. Since the 2008 financial crisis, the country has come under increasing pressure to repeal tighter banking secrecy laws and tighten liberal tax regimes.

Although both issues are deeply rooted in the country’s identity, Bern has recently adopted a more external conciliatory approach to tax reform, arguing that compromise should mean more than just antiquity. Last year, the Federal Tax Reform Act came into force, bringing national corporate tax rules in line with EC EC standards.

Whenever possible, however, Switzerland acted within the country to maintain its successful economic model.

The Federal Technical Working Group is examining how to reduce tax increases, Frey said. Individual cantons are also consulting with large businesses on what means may be available to compensate for higher taxes. Analysts say that one of the issues to be addressed is whether the subsidies will comply with WTO rules.

Most of the largest Swiss companies based in FT-affiliated low-income cantons, including Glencore, declined to comment on the changes proposed by the G7. Roche և Novartis spokesmen said it was too early to assess the impact of the new rules.

A spokesman for Nestle said the company had already paid taxes in 150 countries at a 24% effective global interest rate, which was much higher than the 14% rate in Woo Canton, where it is headquartered.

The new international tax field requires “a strong agreement between all countries” to succeed, Nestle added. “It must be consistent, it must provide certainty. “Avoid double taxation.”

Taxes, Frey stressed, were just one of the things that make Switzerland an attractive place to do business. “We have an open labor market, a highly skilled workforce, very good educational and research institutions, excellent infrastructure,” he said.

However, the stakes are high. The corporate tax greatly contributes to both federal and canton revenues. For example, in the canton of Basel-Stadt, home to 201,000 people, such as the Roche and Novartis pharmaceutical companies, 20 percent of government revenue, about CHF 600 million a year, comes from corporate taxes.

“Large international companies are very important to our canton,” said Sven Michal, secretary general of the Basel-Stadt finance department. “We are not the place where there are many manufacturers of brass plates. The businesses we have here employ a lot of people, they pay a lot of taxes. ”

According to him, reform is “inevitable”, but the federal government must be smart to help minimize the impact of the new changes.

“We are getting ready: The most important message is that we want reform that will save staff and income. That is the goal. “

Additional post by Chris Iles in London

Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button