“America will be competitive thanks to its ability to produce skilled workers, cutting-edge research, sophisticated infrastructure, not because of its ability to have lower taxes than Bermuda or Switzerland.” Thus the Secretary of the United States Treasury Janet Yellen in commenting on the hypothesis of a minimum tax that affects profits made even outside national borders. But what does the project to introduce a global minimum tax mean for those countries, such as Switzerland, considered advantageous from a taxation point of view?
The attractiveness of the Swiss business location is in danger, according to the Swiss Tax Report 2021 by the consultancy KPMG, which points the finger at the project of a global minimum tax for large international companies. A project that has been in the making for years, but to which the change of administration in the USA and the pandemic that forces countries to find resources to finance the plans to exit the crisis have given a boost. US Treasury Secretary Janet Yellen announced a couple of weeks ago, on the sidelines of the World Bank’s International Monetary Fund (IMF) meeting, that discussions are underway with the G20 countries.
The announcement created some alarm in Switzerland because the worldwide minimum tax would limit Swiss tax competition, as Janet Yellen proposed a rate of 21% (the Swiss rate is currently 14.9%). According to Federal Councilor Ueli Maurer, such a project would still be bearable for Switzerland: “Taxes are not the only localization factor for international companies,” he said. “Access to qualified personnel, a flexible labor market, an environment conducive to innovation, political stability and a high quality of life are also important.” Elements which, according to the KPMG report, are gaining increasing importance.