Swiss Voters Approve Corporate Tax Overhaul
May 19 2019 - 11:51AM
Dow Jones News
By Brian Blackstone
ZURICH -- Swiss voters approved a government plan to eliminate
certain tax breaks for multinational companies, bringing the
country in line with international norms while maintaining its
competitiveness.
The measure passed by a margin of 66% to 34% on Sunday,
according to provisional figures from the government.
Switzerland had come under pressure from the European Union and
other international institutions to reform its system and eliminate
the special deals that individual Swiss states, known as Cantons,
have been able to strike with multinational corporations. In
return, the plan adds globally accepted incentives, including
sweeteners for research and development and income generated by
patents.
Business groups had backed the government plan. "Switzerland
must ensure that its tax system continues to enhance its
attractiveness as an economic center," the Swiss Insurance
Association said Sunday after the vote. The law "protects the Swiss
economy from retaliation by foreign countries."
Voters two years ago rejected a plan over concerns that it was
too generous to corporations at the expense of individual
taxpayers. The broad outlines haven't changed much, although the
government eliminated certain tax breaks that were criticized in
the last plan. Critically, it adds about 2 billion Swiss francs in
spending to shore up the country's pension system. That extra
pension money spending was seen as a way to boost public support
for the tax reform measure.
"For the Federal Council and Parliament, reforming corporate
taxation while at the same time financially strengthening the
[pension system] is a balanced compromise from which the entire
population will benefit," the finance ministry said in
February.
Switzerland isn't in the EU, but it agreed with the EU in 2014
to abolish the special arrangements that taxed foreign and domestic
revenue differently. If nothing was done, Swiss-based companies
would have faced the prospect of retaliation from tax authorities
in other countries where they do business.
Write to Brian Blackstone at brian.blackstone@wsj.com
(END) Dow Jones Newswires
May 19, 2019 11:36 ET (15:36 GMT)
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