Switzerland votes this Sunday on a fiscal chapter that has particular implications, from an economic point of view but also from a political point of view in some respects. Swiss citizens are called to pronounce themselves in a popular vote on the OECD-G20 project concerning the minimum tax rate of 15% for multinational companies. Most of the Swiss cantons have so far applied lower rates. The Confederation is part of the OECD and has adhered to the agreement, which has been signed by around 140 states. The Swiss government and parliament support the measure, but in order to introduce it, Switzerland must adapt its rules and also its constitution, hence the need for a popular vote.
Most polls have indicated the possibility of a majority of around 70% for yes. A large majority, therefore, even if down compared to the past months. From a political point of view, the approval of the OECD-G20 minimum rate would put Switzerland in a better light in the eyes of the main international partners, in fact it would essentially be another step in the direction of fiscal concertation on qualifying points. From an economic point of view, for the Confederation there are instead the classic two sides of the coin: on the one hand, more money for the public coffers in the immediate future, on the other, the risk of seeing its attractiveness decrease over time. Moreover, the Government and Parliament believe that the latter will not be affected overall.
To date, the average corporate tax rate of multinationals in the Swiss cantons has been between 11% and 13%, depending on the calculation methods. The 15% adjustment might appear to be a small problem but in reality the figures at stake are not exactly small. Government estimates indicate that with the transition to the minimum rate of 15% higher revenues of 1-2.5 billion francs (more or less the same amount in euros) could reach the public coffers for the first year. The Executive meeting in Bern also underlines the fact that not adhering to the OECD-G20 measure would mean leaving other states the possibility of collecting the difference up to 15% in their favour. Of the 26 cantons, according to 2022 data from Economiesuisse (the association of Swiss companies) 18 have an average rate below 15%, 1 is at this level and 7 are above. If approved, the 15% measure should go into effect in 2024.
The OECD-G20 minimum rate concerns companies and groups present in more than one State and with an annual turnover of at least 750 million euros. Economiesuisse, which voted yes to a minimum of 15%, estimates that there are a little more than 200 companies and groups based in Switzerland and active worldwide; to these must be added about 2,000 branches of foreign companies. According to the Federal Statistical Office, in 2020 in Switzerland there were a total of about 617,000 companies active, therefore the percentage of those that will be subject to the 15% minimum is really very low. But it must of course be considered that the size of the turnover and profits is almost always much greater for companies with international activities. There are extreme cases such as those of the Swiss giants Nestlé in food, Novartis and Roche in pharmaceuticals, Holcim in cement. But there are also many other relevant Swiss or foreign groups of large or medium size.
The Government indicates precisely that the attractiveness of the Swiss economic center will not be compromised with the OECD-G20 minimum rate. According to Bern, taxation in Switzerland will remain moderate overall and the good framework conditions that traditionally encourage the economic activities of Swiss companies and attract foreign ones will continue to make themselves felt. The Executive wants to use the higher income linked to the minimum rate to increase attractiveness.