First steps towards Swiss BEPS. The aggregate corporate tax rate will be lowered to 13.8% from 2019 onwards. Over the weekend, more than 87% of the population of the canton of Vaud voted in favour of the reduction.
Swiss implementation of BEPS initiated – Landslide vote in favour of 13.8% Corporate Tax Rate in Canton of Vaud from 2019
In a much anticipated vote over the weekend more than 87% the population of the canton of Vaud voted in favour of reducing the aggregate ordinary corporate tax rate (Federal and cantonal) to 13.8% from the year 2019 onwards. Currently, the ordinary tax rate is at 21.8%.
This reduction is part of a cantonal action package to implement the BEPS related Federal Corporate Tax Reform III ("CTR III").
Measures proposed under CTR III include the abolition of privileged corporate tax regimes (Holding, Domicile, Mixed and Principal Company; "Privileged Regimes") which are faced with criticism at international level.
At Federal level, the CTR III legislative process is before Parliament. Whereas a number of points are yet to be decided upon (i.a. notional interest deduction, shape of patent box) there is no doubt that the Privileged Regimes are on their way out. Simultaneously, cantons are devising implementation measures.
Vaud is one of the canton that benefited from the Privileged Regimes, and it is the first canton to have taken specific steps in view of the upcoming changes. This unambiguous vote is a welcome strong sign of confidence.
PS: Stay on top of the latest legal topics and subscribe to our blog here: