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Swiss voters reject corporate tax overhaul

Voters in Switzerland have shocked the political institution by rejecting a reform plan that might have introduced the nation’s corporate tax system according to worldwide norms.

The tax reforms, which had been extensively supported by the enterprise neighborhood, would have eliminated a set of particular low-tax privileges that had inspired many multinational corporations to arrange store in Switzerland.

Experts say the way forward for Switzerland’s tax system is now unclear. The vote consequence might create complications for corporations that had been banking on their implementation, and deter corporations who had been contemplating a transfer to the nation.

“They do not know what [tax] measures will be available… That is not a very solid basis for making investment decisions,” Peter Uebelhart, head of tax at KPMG in Switzerland, stated in a video assertion.

Switzerland has come beneath intense stress from G20 and OECD nations in recent times to wash up its tax system. The nation runs the danger of being “blacklisted” by different nations if it would not change its tax system by 2019.

Many voters rejected the tax reform bundle over fears it would scale back the quantity of income collected by the federal government, in accordance with Stefan Kuhn, head of corporate tax at KPMG in Switzerland. That may need result in tax hikes on the center class.

The present tax system provides preferential remedy to some corporations with massive international operations. International tax authorities say the principles quantity to unfair corporate subsidies.

Martin Naville, head of the Swiss-American Chamber of Commerce, stated it is attainable that voters did not perceive the complexities of the reforms. The measures had been rejected by 59% of voters.

“I think it’s a very bad day for Switzerland,” Naville stated. “Clearly, the uncertainty and the credibility in the Swiss [system] has taken a massive hit.”

Related: How Europe’s elections could be hacked

Swiss authorities say they may transfer shortly to create a modified tax reform proposal. Naville stated he hopes new guidelines are devised throughout the subsequent few months.

“All stakeholders now have to take responsibility to develop an acceptable competitive tax system, and to regain credibility regarding the famed political stability which gave Switzerland such an advantageous position,” he stated in an announcement.

Naville hinted that potential tax reforms within the U.S. and U.Okay. might tempt Swiss-based corporations to relocate, placing extra stress on Switzerland’s tax base.

CNNMoney (London) First revealed February 13, 2017: 10:10 AM ET

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