With its decision on 22 December 2023, the Federal Council enacts the relevant Ordinance for implementing OECD/G20 minimum tax rate in Switzerland from 2024. In doing so, the Federal Council did not fully heed calls to postpone the implementaton for one year.
Switzerland is in the process of implementing the global minimum taxation (Pillar Two) as agreed by the OECD/G20 Inclusive Framework. To do so, Switzerland’s constitution will be amended, as explained here.
On Friday, 22 December 2023, the Federal Council has taken the (almost) final step and enacted the relevant Ordinance based on the amended constitution accepted by the Swiss public on 18 June 2023 in order to implement the OECD/G20 minimum tax rate in Switzerland from 2024.
Enactment for financial statements purposes
With the Federal Council’s decision published on 22 December 2023 in an official press release of the Federation, the respective regulations are to be considered as “enacted or substantively enacted” for the purpose of the IFRS® Accounting Standards as issued by the International Accounting Standards Board (IASB).
When does which rule apply?
As per the decision, Switzerland will currently only implement a (Qualified) Domestic Minimum Tax (QDMTT) from 1 January 2024 – applicable for business years beginning from 1 January 2024. The Federal Council has decided to initially refrain from applying the Income Inclusion Rule (IIR) and the Undertaxed Profits Rule (UTPR). With this, the Federal council is at least partially considering concerns of the business community and academia, which requested a delay. In this regard, the Federal Council will continue monitoring international developments and decide about implementation at a later date.