Swiss government says will remain business friendly after G7 tax deal

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Switzerland will make sure it remains attractive to business, the government said, after Group of Seven (G7) nations reached a landmark deal to reduce the incentive of multinational companies to shift profits to low-tax offshore havens.

The finance ministry said on Monday that traditionally low-tax Switzerland had taken note of the G7’s declaration of intent.

“For Switzerland, the focus is on the overall package of competitive framework conditions for its own business location. Either way, Switzerland will take the necessary measures to continue to be a highly attractive business location,” it added.

G7 finance ministers agreed on Saturday to back a minimum global corporate tax rate of at least 15% to squeeze more money out of sprawling companies such as Amazon and Google.

Swiss voters already approved in 2019 a shake-up of the corporate tax system, heading off what its finance minister had called an existential threat to the country’s role as a business hub.

Under pressure from abroad, the Swiss had promised to meet international standards and eliminate special low tax rates that benefited around 24,000 foreign companies based in Switzerland.

The government scrapped special tax status for those companies that paid corporate rates in individual cantons as low as 7.8% to 12%, compared with 12% to 24% for “normal” Swiss companies. Cantons in turn are lowering their tax rates for normal companies to deter them from leaving.

Photo: EPA/SALVATORE DI NOLFI