Switzerland will remain a low-tax centre for big firms

SWITZERLAND IS KNOWN for its delicious chocolate, its luxury watches—and its lightly taxed multinationals. Some 24,000 international companies are domiciled there to benefit from low-tax deals offered by its 26 cantons, which set their own rates on top of the federal corporate income-tax rate of around 8%. Zug, a canton near Zurich, alone is home to some 1,800 of them, including global commodity traders, pharmaceutical giants and a cluster of blockchain and cryptocurrency firms.

When federal and cantonal taxes are combined, Switzerland has an average effective corporate-tax rate of just under 20%, not far below Italy’s and higher than Britain’s (see chart). But sweetheart deals with cantons reduce it to as little as 9% for some big firms. That is set to change—a bit—after Swiss voters approved reforms on May 19th.

These were crafted under pressure from the European Union, which had accused the Swiss of “harmful” tax practices and threatened retaliation. From...

via Business Feeds

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