At its meeting on September 4, 2024, the Federal Council decided to bring the Income Inclusion Rule (IIR) into force on January 1, 2025. In addition to the QDMTT, which was already introduced on January 1, 2024, this rule is intended to ensure that tax revenue remains in Switzerland.
With the IIR, the profits of foreign subsidiaries of Swiss corporate groups and of intermediate holding companies of a foreign corporate group are taxed at a minimum rate of 15%, provided that the corporate group has a worldwide turnover of at least EUR 750 million.
If Switzerland were not to implement the IIR, other countries could tax these foreign profits with the second international supplementary tax, the so-called UTPR. The vast majority of EU member states as well as Australia, Canada and the UK are planning to apply the UTPR from 2025.
The Federal Council has decided not to bring the UTPR into force for the time being, as the risks outweigh the revenue potential. The UTPR is also subject to legal criticism. The Federal Council is also basing this weighing up of interests on an expert opinion by Prof. Dr. René Matteotti from the University of Zurich.
Further information is available here and the report here.
