Swiss cautious about new OECD tax deal

Low tax paddlers: canton Zug in central Switzerland is one region in the crosshairs of the deal. Keystone / Alexandra Wey

After the OECD said on Friday it had finalised the details of a historic global corporate tax deal, Switzerland said it needed more time and clarifications before a full implementation.

The deal, which includes a global minimum tax rate of 15% for big companies, was finalised on Friday by 136 countries, the Organisation for Economic Cooperation and Development said.

“Today’s agreement will make our international tax arrangements fairer and work better,” said OECD Secretary-General Mathias Cormann. “This is a major victory for effective and balanced multilateralism.”

In a statement External linkon Friday evening, Switzerland – a signatory of the agreement – repeated its demand that “the interests of small, robust economies are taken into account in the implementation, and that legal certainty is established for the countries concerned”.

The Swiss finance ministry said open points included the assurance that rules would be applied uniformly worldwide and that they would be “subject to a dispute settlement mechanism”.

However, it said it was satisfied that certain points have been clarified since the agreement was first announced in July: “the new taxing rights for market jurisdictions are moderate, and unilateral digital taxes are to be abolished with binding effect”.

Switzerland, home to many big multinationals, has an average corporation tax rate of just under 15%, but some of its individual low-tax cantons such as Zug have lower rates again.

Switzerland is also concerned about the implementation date of 2023, which it say will “not be possible” given the speed of the country’s legislative system.

It’s too early to say if voters will have a say on the deal, as they did on separate corporate tax reforms in 2017 and 2019.

Not all countries welcomed the deal on Friday; some said it would still disproportionately benefit rich nations rather than fundamentally redistribute multinational taxes; the Oxfam charity called it a “rich country stitch-up”.

The OECD said the minimum rate of 15% will see countries collect around $150 billion (CHF139 billion) in new revenues annually, while taxing rights on more than $125 billion of profit would be shifted to countries where big multinationals earn their income.