ZURICH: Switzerland’s Federal Council, during its 31 January meeting, set out the parameters for the reform of Switzerland’s international tax system, stressing the need to respond to the significantly changed international environment. In particular, the Federal Council decided that the Swiss reform proposal, known as known as Tax Proposal 17, should provide for an increase the cantons’ share of direct federal tax to 21.2 percent, as suggested by the cantons and communes during the consultation procedure on the reform. The Federal Council confirmed that Switzerland’s tax reform proposal will include the introduction of a patent box that would be mandatory for all cantons and an additional deduction for research and development that would be optional.
Moreover, under the tax reform, 70 percent of dividend income from qualified participations would be taxed at the federal level and at least 70 percent of this income would be taxed at the cantonal level.
In addition, the Confederation’s minimum guidelines for family allowances should be increased by CHF 30 per child, the Federal Council concluded. The Federal Council mandated that the Federal Department of Finance should prepare a dispatch by the end of March together with an estimation of the dynamic financial implications of Tax Proposal 17 for the Confederation and the cantons.
