Impact of the OECD Minimum Tax on Switzerland

Background to the OECD Minimum Tax

In line with the objectives of the minimum tax project launched by the OECD and G20, multinational enterprises with consolidated revenues of EUR 750 million or above are to pay a minimum tax rate of 15 per cent in every country in which they operate. If the tax rate in a certain country is below 15 per cent, a top-up tax must be paid to make up the difference. Each country is free to choose whether or not to introduce the OECD Minimum Tax rules unilaterally. Those that do will need to comply with the OECD’s framework in full, something that is monitored by peer review.

The top-up tax is collected in three stages. Every country can impose a domestic minimum top-up tax to bridge the gap to the 15 per cent figure. If it opts not to, the country in which the corporation’s parent company (or an intermediate holding company) has its registered office can levy a cross-border top-up tax on the profits of foreign subsidiaries held directly or indirectly. This is based on what the OECD calls the Income Inclusion Rule, or IIR. If the country in which the ultimate parent company has its registered office does not enforce the IIR, all the other countries in which the corporation has subsidiaries can apply their own top-up tax to the profits taxed at too low a rate in accordance with the OECD’s Undertaxed Profit Rule, or UTPR.

By threatening ‘revenge taxes’ (especially extra withholding taxes on payments to non-US companies), the USA carved out a specific exemption for its own corporations. This came into force on 1 January 2026 (known as the side-by-side system) and only benefits corporations whose ultimate parent company is based in the USA. It means that individual countries can still levy top-up taxes at national but not international level. Other countries could also claim the specific exemption as a basic principle – China and India have already expressed an interest and are being considered by the OECD.

The OECD Minimum Tax in Switzerland

In a referendum, around 80 per cent of Swiss voters and all cantons supported the introduction of the OECD Minimum Tax in Switzerland. The Federal Council then introduced the tax in two stages: on 1 January 2024 (domestic top-up tax) and 1 January 2025 (cross-border top-up tax following the IIR). The Federal Council has not yet introduced a cross-border tax following the UTPR, due to political reasons and concerns over legal certainty. It estimates that ‘several hundred’ (listed and unlisted) Swiss corporations and ‘several thousand’ foreign corporations with Swiss-based subsidiaries will be affected. The Federal Council is initially forecasting additional annual tax receipts of between CHF 1.5 billion and CHF 3.5 billion in the first few years of the scheme.

Key findings in 2026

‘Corporate Tax Reform IV’ needed

The OECD GMT is not going away any time soon, despite receipts being highly likely to remain below expectations. The EU and most other participating countries are likely to persevere with it, not least due to their high debt levels. Here in Switzerland, however, the criticism is not going to die down. Quite the opposite, in fact: The combination of high compliance costs, low tax takings and unequal treatment compared with US corporations is having an adverse impact on the country as a place to do business. The federal and cantonal governments need to take action to preserve its commercial appeal.

Deloitte therefore feels that the time is ripe for a fourth corporate tax reform. The plan to convert the ordinance on minimum taxation into a fully fledged federal act could form the basis for a ‘Corporate Tax Reform IV’. Deloitte believes that, without reform, Switzerland will gradually lose its appeal – not through mass exoduses but through an increase in new jobs and new investment being based abroad rather than at home.