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Swiss voters paved the way for a reform of corporate taxes on Sunday. This means the tax cuts that were enforced in Basel-Stadt retroactively as per 1 January are confirmed.
The result of the referendum was clear, with 65.6% of Swiss citizens voting in favour of the project proposed by the Swiss government. The corporate tax reform proposal was linked to old-age and survivor’s insurance (AHV) reform. The approval margin in the canton of Basel-Stadt was even higher at almost 70%. The result means that the existing tax breaks for privileged companies will be abolished. Conversely, the cantons can now apply a range of instruments to safeguard and strengthen their competitiveness internationally as corporate locations.
Martin Dätwyler, Director of the Basel Chamber of Commerce, welcomes the approval by Swiss voters. As he is quoted as saying in a press release: “Today’s decision will provide a balanced solution for companies, create legal certainty and preserve the attractiveness of the Basel Region as a business location”.
Basel-Stadt was the first canton to implement this proposal. Hence, rates of income tax were already cut on 1 January and deductions for health insurance payments were raised. The effective corporate income tax rate dropped to 13 percent, and capital tax rate was reduced to 0.1 percent. By accepting the national proposal on Sunday, the Patent Box, which will allow a portion of the revenues from patents and similar rights to be taxed at a reduced rate in the cantons in the future, can now be introduced.
The existing tax-privileged companies make up only 5% of all companies in the canton of Basel-Stadt, but contribute to 60% of the revenues from taxes on profit and capital.
The Cantonal Parliament of the canton of Basel-Landschaft will discuss the cantonal implementation of the tax proposal in June.