Amended draft of Pillar Two implementation ordinance

The amendments to the draft ordinance mainly relate to the tax procedure in Switzerland but also provide input on the timing of UTPR introduction.

The Swiss Federal Council has published an amended draft to implement global minimum taxation (Pillar Two). The Domestic Top-up Tax and the Income Inclusion Rule (IIR) will likely be introduced in 2024, while the UTPR is expected to follow in 2025. The Government aims to mirror timeline of the EU.


Switzerland is in the process of implementing the global minimum taxation (Pillar Two) agreed by the OECD/G20 Inclusive Framework by amending the constitution. See further information here

Olivier Eichenberger

Director, Corporate Tax

KPMG Switzerland

Latest action

On Wednesday, 25 May 2023, the Swiss Federal Council published an amended draft of the implementation ordinance to implement Pillar Two in Switzerland. This ordinance is based on an expected amendment of the constitution, including temporary arrangements with basic parameters that empower the government to release the respective (temporary) implementing ordinances, expected as of January 2024. 

In the latest amendments, the taxable business units and the procedure for levying the top-up tax were determined. To minimize the administrative burden, the tax is to be paid by the economically most significant unit of a group of companies. This unit pays the tax for all units in Switzerland in its canton. The canton then transfers the other cantons' share of the revenue from this tax.

The top-up tax is to be levied by the cantons as part of a mixed assessment procedure, similar to corporate income tax. The tax authorities calculate and assess the tax, while the taxable business entities are obliged to submit a self-declaration. The declaration and the procedure are handled electronically via a portal. In the event of disputes regarding the assessment, appeals can be filed directly with the Federal Administrative Court.

Next steps

The amendment of the constitution is subject to a referendum on 18 June 2023. If then confirmed, the Federal Council will go ahead and implement the minimum taxation.

The Domestic Top-up Tax and the Income Inclusion Rule (IIR) are expected to be introduced in Switzerland for business years beginning on or after 1 January 2024 (or even 31 December 2023 to be in line with the EU). The date for the introduction of the Undertaxed Profits Rule (UTPR) may likely be different following international developments. It is becoming apparent that the UTPR will be introduced by a large number of countries, in particular in the EU, at a later point in time. This possibility is to be left open in today's draft ordinance. It is anticipated that the UTPR will be introduced for business years beginning on or after 1 January 2025 (or 31 December 2024) as foreseen by many states. Accordingly, Switzerland’s intended implementation timeline matches the plans of important other countries.

Considering the timeline and progress so far, companies should continue to analyze how and to what extent minimum taxation affects them. And they should in particular ensure that they can provide the respective data for declarations.

We continue to follow Pillar Two developments in Switzerland closely and will share our take on its implementation as it progresses through the legislative process.