Canton of Zurich votes YES for Corporate Tax Reform

In today's vote the people approved the implementation of the Swiss Corporate Tax Reform in the canton of Zurich. With the new law, which will enter into force on January 1, 2020, the canton of canton of Zurich remains attractive for international businesses, particularly for headquarters of international companies, for their R&D operations and for their group finance activities.

The canton of Zurich will provide for the maximum deduction (90%) on income from patents (patent box) and for the maximum R&D super-deduction (150%). In addition, the canton of Zurich provides as the only Swiss canton for a notional interest deduction, which is particularly important for group finance companies and which allows strengthening equity without losing tax benefits. Although the ordinary corporate income tax rate will only be reduced from currently 21.2% to 18.2% (in two steps), these benefits (in particular patent box and R&D super deduction) allows a company to end up with an effective tax rate of as low as approx. 11.2%, which is a more than competitive rate. With this, together with the other advantages a company finds in Switzerland and particularly in Zurich, e.g. the liberal labour law, the close and easy cooperation with universities in the field of R&D, the regulatory environment in the life science, data and other sectors and the comprehensive infrastructure, both national and international companies will continue to successfully develop their business.

New business brought to Switzerland will in addition to the above benefit from a step-up of Goodwill and other intangible value, also allowing the significantly reduce the tax rates.

And the really good news: other than in other jurisdictions, the tax rates can be expected to remain as low as they are today, given the steady competition to attract business between the different cantons!