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September 23, 2016
2016-1611

Swiss canton of Geneva releases plan for local implementation of Corporate Tax Reform III

The Swiss Corporate Tax Reform III (CTR III) foresees the replacement of certain tax regimes with a new set of internationally accepted measures. The legislative changes will implement a broad reduction of headline corporate tax rates and will ensure that Switzerland remains attractive for multinational corporations in a post-base erosion and profit shifting (post-BEPS) environment by providing planning certainty for the future and ensuring compliance with international taxation standards. On June 17, the Swiss Parliament adopted the final CTR III package to strengthen Switzerland's attractiveness as a business location. The new legislation will be subject to a public vote, which will likely take place in February 2017, and is expected to become effective on January 1, 2019. The cantons are required to adjust their cantonal tax laws in accordance with CTR III.

The Government of the canton of Geneva (Geneva Government) presented its strategy for the implementation of CTR III into cantonal law on August 30, and opened a consultation procedure on the proposal. The plan includes, among others, the introduction of a patent box as well as increased deductions of research and development (R&D) expenses. The key feature of the proposal is a substantial reduction of the headline tax rate from currently 24.2% to 13.49% (including federal tax).

A Tax Alert prepared by EY's Global Tax Desk Network, and attached below, provides additional details.

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Full text of Tax Alert 2016-1611

 

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