07/11/19

SWITZERLAND: OECD-led Tax Reforms could cost more than $5 bln - President.

As published on uk.reuters.com, Tuesday November 5, 2019.

ZURICH, Nov 5 (Reuters) - Corporate tax reforms proposed by the OECD to give governments more power to tax big multinationals could cost global hub Switzerland more than 5 billion Swiss francs ($5.06 billion) in lost revenue, President Ueli Maurer said.

He told the Neue Zuercher Zeitung paper in an interview that fighting the plan was likely a lost cause at this stage, but Switzerland and allies would do what they could to limit the looming damage.

Under an overhaul of decades-old rules unveiled last month by the Organisation for Economic Cooperation and Development, states can go after multinationals like Google, Apple and Facebook doing business in their countries.

That poses a danger to Switzerland, whose low taxes and political stability attract thousands of multinationals despite a shake-up approved by voters this year that makes the country less of an international pariah.

“It is certain that Switzerland is facing large lost tax revenues,” Maurer, who is also finance minister, said in the interview printed on Tuesday. “We first said they would be between 0.5 and 5 billion francs, but it could be even more.”

He said international efforts by big countries to harmonise tax rates were worrying for Switzerland. “The exercise probably can’t be blocked any more, so we, along with like-minded countries, are trying to limit the damage.”

In Europe these included Luxembourg, Ireland and Sweden. New Zealand, Canada, Singapore, the United Arab Emirates and Saudi Arabia were also in this camp, he said.

Negotiations on the new tax regime are under way, with the aim to put an outline agreement in January to the 134 countries that have signed up for the reform.