Global minimum tax of 15%

After years of negotiations, the Finance Ministers of the G7 countries (Germany, France, Italy, Japan, Canada, the United Kingdom and the United States) have agreed on global tax standards for companies, which are intended to stop the current international tax competition with ever lower tax rates.

According to a joint declaration by the finance ministers of the G7 countries, which was achieved thanks to the concession made by US Treasury Secretary Janet Yellen, profits of large corporations are to be taxed more heavily and more fairly in the future. In addition to a minimum tax of 15 percent, large corporations with a profit margin of more than ten percent will in the future pay taxes where they make their sales and no longer just in the country in which they have their tax domicile - which is todays standard practice.

Finally, multinational corporations will bay pay more taxes in order to relieve or restructure state assets, some of which have been severely stretched in the recent years. Until now, corporate taxes have only been due at the company's headquarters, but not in the countries where the corporations are active, which often has a global dimension in the case of large digital companies such as Apple, Google, Facebook or Amazon. Until now, this has led many companies to relocate their headquarters to countries with low corporate taxes. In the future, however, taxes will be paid at the place of turnover.

For Switzerland, where many global companies are headquartered, the new minimum tax of 15 percent would mean an increase in the tax rate for corporate profits for 18 out of 26 cantons, and the (still) attractive tax rates recently introduced as part of the Federal Act on Tax Reform and AHV Financing (TRAF) would have to be adjusted again. In addition, shifting the right of taxation to the place of turnover would probably have a far greater impact on companies than is seems to be today.

Even if the details of the G7 declaration still have to be worked out and the G20 and OECD countries will also be discussing it, there is already an urgent need for action to be taken by internationally active companies.

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