On 18 June 2023, a substantial majority of the people and the cantons cast their votes in support of a special tax regime designed for large corporate conglomerates. Thus, it was the responsibility of the Federal Council to temporarily enforce the so-called OECD/G20 minimum tax rate through the enactment of a Minimum Taxation Ordinance. In this regard, the transitional provision of the Federal Constitution establishes an additional tax. The Federal Council is required to present to Parliament, within six years of the ordinance’s implementation, a draft law that will serve as an alternative to the Minimum Taxation Ordinance.

The implementation of the minimum tax rate will occur via a national supplementary tax. Switzerland will enforce a minimum domestic tax rate of 15% on large multinational corporations with a revenue surpassing EUR 750 million through the implementation of this supplementary tax. This shall prevent the Swiss tax base from being eroded in favour of other nations.

The Constitution’s transitional provision outlines essential criteria that must be met by the ordinance. The Federal Council stated that it observed that the prerequisites for putting the supplementary tax into force in Switzerland with effect from 1 January 2024 have been met, in particular now that the vast majority of EU member states and other Western industrialised nations such as the United Kingdom plus South Korea have opted to implement the regulations as of the same date. By contrast, the Federal Council has decided to initially refrain from applying the international supplementary tax rules IIR and UTPR. In this regard, the Federal Council stated it will continue to monitor international developments and decide about implementation later, should this prove necessary in order to preserve Swiss interests.