Switzerland introduces 15% tax on excess profits of international corporations
Switzerland is introducing a 15% tax on the excess profits of international corporations following the announcement of the results of a referendum held in the country this Sunday, 18 June. In a popular vote, the Swiss also expressed support for the country's move towards climate neutrality.
This was reported by Reuters
Referendum also supported a climate law that will make Switzerland climate neutral by 2050. 78.5% of voters, the sixth highest figure in the last two decades, were unanimous in their responses to the referendum questions. All 26 Swiss cantons supported the innovation, with a voter turnout of 41.9%.
On January 1, 2024, Switzerland implemented its own version of the Organization for Economic Cooperation and Development (OECD) Agreement aimed at combating tax evasion by multinational companies.
Following the referendum, Switzerland will set a new minimum tax of 15% for all companies with revenues of more than EUR 750 million per year. Until now, all 26 cantons of the country have used individual rates, which, however, mostly did not exceed 15%. Overall, the average rate in the country before the referendum was 13.5%.
The new reform is expected to bring Switzerland an additional 2.5 billion Swiss francs annually, 75% of which will be allocated to the cantons where companies paying 15% tax are located. Instead, 25% will be transferred to the federal government.
The regions, in turn, plan to invest their profits in keeping themselves attractive for business, using subsidies and tax breaks to do so.
In addition, in the referendum, the Swiss supported the country's movement towards climate neutrality. To this end, by 2040, Switzerland must reduce emissions by 75% compared to 1990 levels and reduce the consumption of fossil fuels.
According to DW, Switzerland plans to accelerate the refusal from oil and gas with the help of financial incentives. It will also provide support to companies during the transition to clean energy sources planning to allocate 3.2 billion Swiss francs over the next 10 years.
Climate change is becoming a growing challenge for global governments. In 2021, the European Council adopted a climate law under which alliance countries pledged to reduce greenhouse gas emissions by 55% by 2030 and become climate neutral by 2050.
As part of this initiative, the neighboring country to Switzerland, Germany, is allocating 53 billion euros to support industrial enterprises participating in the country's decarbonization program.