Third series of corporate tax reforms ready for parliamentary deliberation

Bern, 05.06.2015 - During its meeting today, the Federal Council adopted the dispatch on the Corporate Tax Reform Act III. The reform aims to strengthen Switzerland as a business location, focusing on innovation, value creation and jobs. The proposed measures are compatible with the current international standards and will increase legal and planning certainty for companies. At the same time, the reform ensures that companies will make an appropriate contribution to the tax revenue of the federal government, the cantons and the communes also in the future.

Based on the consultation findings, the Federal Council defined the parameters for the third series of corporate tax reforms (CTR III) on 1 April 2015. The dispatch on the "Federal Act on Tax-Related Measures to Strengthen the Competitiveness of Switzerland as a Business Location" is now available. It includes both tax policy and fiscal policy measures. Any adjustment to cantonal profit tax rates is not part of the reform, as only the cantons have the authority to make such decisions.

Tax policy measures

Within the framework of the CTR III, the cantonal tax statuses for holding companies and management companies are to be abolished. While these arrangements made a valuable contribution to the business location's appeal in the past, they are no longer compatible with the international standards, which is proving to be a growing disadvantage for companies engaged in cross-border activities.

A patent box is to be introduced for cantonal taxes. This will make provision for preferential treatment for revenue from patents and similar rights associated with research and development in Switzerland. The cantons will additionally have the option of envisaging increased deductions for research and development expenditure. Moreover, they will be able to introduce targeted capital tax reductions. In contrast, the Federal Council will refrain from proposing the introduction of a tonnage tax, as this measure would not be compatible with the constitutional requirements.

Further tax measures are to be taken to strengthen the tax system. These include uniform rules for the disclosure of hidden reserves, as well as the abolition of the issue tax on equity capital. An adjustment at the shareholder level is also included: dividends paid to shareholders are only to be taxable at 70% in order to take appropriate account of the burden of double taxation (= taxation of profits and of dividends). As is the case under currently applicable law, the prerequisite for this reduction is a stake of at least 10% in the company paying the dividends.

Fiscal policy measures

The tax policy measures will be implemented largely in the cantons and their communes. By contrast, the Confederation will benefit from the preservation of tax competitiveness in the form of direct federal tax receipts. It intends to use equalization measures also in the future to ensure a balanced distribution of the burden between the Confederation and the cantons and create fiscal policy leeway for any profit tax reductions in the cantons. In addition, the cantons' share of direct federal tax is to be increased by 3.5 percentage points, bringing it from 17% at present to 20.5%.

Fiscal equalization has to be adapted to the new tax policy framework. The reduced fiscal utilizability of profits will be taken into account by means of new weighting factors. During a transitional period, the supplementary contribution will ensure that the financially weakest cantons do not fall below the minimum financing target under the current system.

It is estimated that the reform will have an annual financial impact of CHF 1.3 billion on the federal finances. The additional burden of CHF 1.4 billion stands against approximately CHF 0.1 billion resulting from additional receipts from the modification of the partial taxation of dividends. These figures do not include any effects from the influx or exodus of companies or the shifting of corporate functions. The measures decided by the Federal Council to adjust the budget will ensure that the remaining burden can be absorbed without short-term expenditure cuts, despite the weaker fiscal policy outlook. The CTR III will be factored into financial planning for the first time with the 2017-2019 legislature financial plan.


The reform will give corporate taxation a foundation that is in line with the current international standards. It will ensure a competitive environment for companies operating in Switzerland, particularly for activities associated with a high degree of innovation, value creation and jobs. It respects the cantons' tax and fiscal policy autonomy while guaranteeing that inter-cantonal competition remains balanced and that the financial impact is bearable for the Confederation, the cantons and the communes.


Address for enquiries

Tax policy:
Fabian Baumer, Vice-Director, Federal Tax Administration FTA
Tel. +41 58 465 31 67,

Fiscal policy:
Philipp Rohr, Communications Officer, Federal Finance Administration FFA
Tel. +41 58 465 16 06,


The Federal Council

Federal Department of Finance

Federal Department of Finance

Federal Department of Finance