MIL-OSI Translation: OECD minimum tax: In principle, revenue from the supplementary tax should go to the cantons


MIL OSI translation. Region: Germany/Germany –

Source: Switzerland – Canton Government of Basel Town in German

The Federal Council has published the message on the minimum taxation of large, international companies. According to the OECD, they should pay a profit tax of at least 15 percent from 2024. The Federal Council wants to ensure minimum taxation with a supplementary tax. In deviation from the consultation draft, according to the embassy, only 75 percent (instead of 100 percent) of the revenue from the supplementary tax should go to the cantons concerned.

Basel-Stadt is badly affected. Around 50 domestic and foreign companies, which pay around CHF 500 million in taxes in the canton and taxes of a similar amount to the federal government, are expected to have to implement the minimum tax. They offer around 30,000 jobs in Basel-Stadt.

Income from the supplementary tax is very uncertain and can only be realized if the canton can maintain its current location quality. The cantons need financial resources for this. The canton of Basel-Stadt could also be negatively affected by another element of the OECD reform: In the so-called Pillar 1 of the project, taxation rights are to be shifted to market states in the future. If this part of the project is implemented, the canton of Basel-Stadt would have to fear a significant loss of income.

In order for the canton of Basel-Stadt to be able to maintain the quality of the location and manage the risks of the project, the government council is in favor of a 100 percent share of the supplementary tax in favor of the cantons concerned. The resource-weak cantons also benefit indirectly from this: within the framework of the National Fiscal Equalization (NFA), the additional income – if it can be realized – benefits all cantons.

In accordance with the compromise reached by the conference of cantonal finance directors, the cantonal government can envisage a maximum 25 percent revenue share from the federal government in the supplementary tax if the prospect of stable and substantial additional revenue is substantiated. They should be used for measures that improve the quality of Switzerland as a business location. From the point of view of the Canton of Basel-Stadt, it would make the most sense to use these funds to increase federal contributions to universities. This measure would benefit the whole of Switzerland, alleviating the shortage of skilled workers and supporting the quality of the location in an important dimension.

EDITOR’S NOTE: This article is a translation. Apologies should the grammar and/or sentence structure not be perfect.

MIL Translation OSI