• Olivier Eichenberger, Director |

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

Latest update

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. 

What is new in the final Ordinance?

Compared to the amended draft of the implementation Ordinance published on 25 May 2023, the Swiss Federal Council included in the final version to enter into force on 1 January 2024 for instance that the QDMTT is to be calculated based on the local Financial Accounting Standard Swiss GAAP FER if such financial statements are available for all Swiss constituent entities and have been audited. If no such financial statements are available (for all relevant Swiss entities), then QDMTT is to be calculated based on the financial statements used for group consolidation at the level of the Ultimate Parent Entity. 

Next steps

With the implementation of the QDMTT taking place as from 2024, it is now in the hands of the cantonal tax administrations in charge to actually implement the new tax in practice. As the Swiss regulations are lean and refer to the OECD Model Rules, commentary and guidance, such documents are to be considered. The global minimum tax will still evolve, for instance regarding the lapse of transitional safe harbor rules or the potential implementation of further transitional or permanent safe harbor rules. 

Furthermore, it needs to be monitored if and by when Switzerland is going to implement the IIR and UTPR. This could be as soon as of 2025. 

International developments and practical experience in the next few years can be taken into account when drafting a new federal law on minimum taxation, which should be done within 6 years. 

However, groups in scope of Pillar Two – if they have not already done so – now need to understand how they are affected by minimum taxation rules – not only in Switzerland but around the world. In particular, it is important to ensure that the respective data for calculating safe harbors, top-up taxes and the later declarations is available and can be provided.

We will continue to closely follow Pillar Two developments in Switzerland and will share our views as they evolve.

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