Switzerland to vote on further reducing taxes for large businesses

The Swiss government is looking to move forward with its plans to partially abolish the stamp tax, in order to make Switzerland more competitive in attracting international companies and new businesses. However, division in the Swiss parliament and among labour unions, means the issue will become a referendum.

Swiss stamp tax modified to support businesses

The stamp tax (occasionally called issuance stamp tax or capital duty) is a form of business taxation that sees a 1 percent tax on company assets or business trades of over one million Swiss francs. The current referendum hopes to abolish the stamp tax in cases where a company is raising funds for growth.

Advocates for reforming the tax, like the Director of the Federal Tax Administration, Adrian Hug, argue that it makes starting a business more expensive as “they have to pay taxes [on assets] before they even make a profit of one Swiss franc.” This extra expense, critics argue, puts off entrepreneurs from starting a business in Switzerland.

Speaking on behalf of the Federal Council, Finance Minister Ueli Maurer claimed that Switzerland “can hardly afford to maintain special taxes,” especially ones considered to be harmful and obsolete to business. He noted that as the OECD’s plans for global corporate tax reform takes hold, abolishing the stamp tax would strengthen Switzerland as a business location.

In regard to jobs, Maurer noted that the taxes paid by businesses in Switzerland have subsidised the low taxes paid by workers. He argued that these companies should be granted relief, as the 250 million Swiss franc shortfall for abolishing the tax is “manageable.”

Opponents say business tax cuts only benefit the rich

Opponents of the tax reform argue that corporations would be the only benefactor of a stamp tax cut, with the shortfall being made up by workers. They say that previous attempts to reform taxation in this way has not worked and they fear that current legislation is only the start of a pro-business overhaul of the tax code.

Opponents, like the Social Democratic Party of Switzerland, hope that a campaign that highlights the direct impact of the tax reform on working people will mean victory at the referendum. This is not the first time Switzerland has gone to the polls over business tax reform, with two previous attempts being rejected by the public in 2012 and 2017. The new referendum is set for February 13, 2022.