| Status | Enacted |
| Law | On September 12, 2025, the Swiss Federal Council issued the Federal Decree on the Approval of the Multilateral Agreement of the Competent Authorities on the Exchange of Global Anti-Base Erosion Declarations, which ratifies the OECD GIR MCAA. On April 30, 2025, the Swiss Federal Council issued a proposal to update the Swiss Minimum Tax Ordinance to provide for the OECD provisions relating to the submission of GloBE Information Returns, including the guidance issued in January 2025. The amended Ordinance also updates the application of the OECD Administrative Guidance applied in Switzerland to include the January 2025 OECD Administrative Guidance and the use of the 2025 Consolidated Commentary. This was approved by the Federal Council on November 26, 2025. On December 22, 2023, the Swiss Federal Council issued an Ordinance to apply a QDMTT from January 1, 2024. On September 4, 2024, the Swiss Federal Council announced the application of the IIR from January 1, 2025. On November 20, 2024, the Swiss Federal Council issued the amended Minimum Tax Ordinance to apply the IIR from January 1, 2025 |
| Effective Date | January 1, 2024. |
| IIR | January 1, 2025 (substantively enacted for IFRS and US GAAP) |
| UTPR | No |
| QDMTT | Yes – January 1, 2024 |
| Filing Deadlines | Standard |
| Safe Harbours | Transposed from OECD Guidance |
On September 12, 2025, the Swiss Federal Council issued the Federal Decree on the Approval of the Multilateral Agreement of the Competent Authorities on the Exchange of Global Anti-Base Erosion Declarations, which ratifies the OECD GIR MCAA.
In March 2025, Switzerland issued a notice on the tax treatments of Permanent Establishments for Pillar 2 purposes.
On April 30, 2025, the Swiss Federal Council issued a proposal to update the Swiss Minimum Tax Ordinance to provide for the OECD provisions relating to the submission of GloBE Information Returns, including the guidance issued in January 2025. The amended Ordinance also updates the application of the OECD Administrative Guidance applied in Switzerland to include the January 2025 OECD Administrative Guidance and the use of the 2023 Consolidated Commentary.
On November 20, 2024, the Swiss Federal Council issued the amended Minimum Tax Ordinance to apply the IIR from January 1, 2025.
On September 4, 2024, the Swiss Federal Council announced that the IIR is to apply from January 1, 2025.
On December 22, 2023, the Swiss Federal Council issued an Ordinance and announced Switzerland is to apply a QDMTT from December 31, 2023. The IIR and UTPR are to be delayed.
On August 17, 2022, the Swiss Federal Council issued a draft decree for the implementation of Pillar Two.
On May 24, 2023, Switzerland issued an updated Draft Decree for the Pillar Two Global Minimum Tax.
Decree
On August 17, 2022, the Swiss Federal Council issued a Draft Decree for the implementation of Pillar Two of the OECDs Two Pillar Solution from January 1, 2024. The Draft Decree was subject to a consultation procedure until November 17, 2022.
On May 24, 2023, a second Draft Decree was issued that was subject to consultation until September 14, 2023.
Both Decrees were then merged, and on December 22, 2023, the Swiss Federal Council issued the Ordinance on the Minimum Taxation of Large Groups’ (the ‘Pillar Two Ordinance’) to introduce the Pillar Two GloBE rules in Switzerland from January 1, 2024.
However, only the national domestic top-up tax (intended to be a Qualified Domestic Minimum Top-Up Tax) applies from January 1, 2024. On September 4, 2024, the Swiss Federal Council announced that the Income Inclusion Rule (IIR) will apply from January 1, 2025. The Under-Taxed Profits Rule (UTPR) is not yet applicable.
On April 30, 2025, the Swiss Federal Council issued a proposal to amend the Minimum Tax Ordinance to provide for the procedure for submitting the GloBE Information Return (‘GIR’) to the Federal Tax Administration (FTA), the international exchange of the GIR by the FTA, and its use by the cantons.
Entry into force is scheduled for January 1, 2026. The consultation runs until August 20, 2025.
Constitutional Amendment
A constitutional amendment was required to implement differentiated company taxation.
On December 16, 2022, the Swiss parliament approved the draft constitutional and in a public referendum on June 18, 2023, Switzerland approved the global minimum tax. As such, Switzerland will implement the Pillar Two GloBE rules via a temporary decree of the Federal Council.
Sub-section 9 of the transitional rules for the constitutional amendment requires the Federal Council to provide Parliament with legislation for the implementation of Pillar Two by Federal Act within six years after the introduction of the Pillar Two rules by temporary ordinances.
General
The Pillar Two Ordinance does not attempt to redraft the OECD Model Rules, instead it transposes the OECD Model Rules into Swiss law by way of a direct static reference in Article 2 of the Pillar Two Ordinance.
The implementation of the Pillar Two rules via a static reference to the OECD Model Rules means that if the OECD Model Rules were to change, the Pillar Two Ordinance may need to be amended.
It also provides that the OECD Model Commentary applies when interpreting the OECD Model Rules. The Explanatory Notes to the Pillar Two Ordinance also provides that all other OECD documents
must be taken into account as part of the interpretation. As such the OECD Administrative Guidance would be directly applicable in Switzerland.
This makes the Swiss Pillar Two Ordinance much shorter than the EU legislation and other jurisdictions that apply full-form legislation.
Wherever the OECD Model Rules use the text ‘Implementing Jurisdiction’, the Pillar Two Ordinance provides that this is considered to be Switzerland.
Safe Harbours
Article 2(3) of the Pillar Two Ordinance provides that the application of the GloBE model regulations must be interpreted in accordance with the OECD Commentary and other documents issued in the Implementation Framework.
The Explanatory Notes to the Pillar Two Ordinance confirm that this includes the Safe Harbours (provided for in the December 2022 Safe Harbours and Penalty Relief Guidance and the December 2023 OECD Administrative Guidance), including the Transitional CbCR Safe Harbour, and the QDMTT Safe Harbour.
In terms of the QDMTT Safe Harbour, the OECD Administrative Guidance provides that a QDMTT must meet three additional requirements before a jurisdiction can qualify for the QDMTT Safe Harbor. This includes the Accounting Standard, Consistency Standard and the Administrative Standard.
The Explanatory Notes to the Pillar Two Ordinance states that the Swiss QDMTT should meet these requirements.
Inclusion of Corporate Inversion Anti-Avoidance Rule
Article 2(2) of the Pillar Two Ordinance excludes Article 9.3.5 of the GloBE Model Rules.
This is an optional anti-avoidance rule for corporate inversions that jurisdictions can choose to implement or not. It relates to the transitional rule that excludes MNEs from the under-taxed payments rule for the first five years of operations.
Differences to Model Rules
The fact that the OECD Model Rules are incorporated by a static reference means that much of the detailed application rules and definitions are not included in the Pillar Two Ordinance.
The static reference includes reference to the Commentary and other relevant Regulations. As such the OECD Administrative Guidance should apply. The caveat to this is that the Explanatory Notes to the Pillar Two Ordinance specifically state that a static reference is used, as a dynamic reference to the Model Rules would be constitutionally problematic. As such, whenever there are changes to the Model Rules (whether as direct changes or changes to interpretation), the Swiss Authorities are to issue an interpretation on the validity of the changes.
The Pillar Two Ordinance applies the new Global Minimum Tax in two ways:
– a “Swiss Supplementary Tax’; and
– an ‘International Supplementary Tax’.
The ‘International Supplementary Tax’ applies the IIR provisions of the OECD Model Rules to foreign low-taxed constituent entities. It follows the OECD Model Rules and applies the income inclusion rule on a top-down basis to Swiss UPEs and Intermediate Parent Entities where the MNE Group has turnover of at least 750 Million Euros. It doesn’t specifically mentioned Partially-Owned Parent Entities, but they would be included due to the general transposition of the Model Rules in any case.
It also includes the UTPR where there is at least one constituent entity in Switzerland.
Article 40(2) of the Pillar Two Ordinance provides that the International Supplementary Tax was to be delayed. On September 4, 2024, the Swiss Federal Council announced that the IIR is to be applicable from January 1, 2025. The UTPR provisions are not yet implemented.
The Swiss Supplementary Tax is a domestic minimum tax. It allows Switzerland to tax the low-taxed profits of entities located in Switzerland up to the 15% minimum rate. The explanatory notes make it clear that the location of the UPE is irrelevant for the purposes of the Swiss Supplementary Tax, and therefore this would apply irrespective of whether the UPE jurisdiction introduces Pillar Two Rules or not.
Article 2(1) of the Pillar Two Ordinance provides that the Swiss Supplementary Tax is calculated based on the provisions of the OECD Model Rules ‘by analogy’. This therefore ensures that the Swiss Supplementary Tax is a Qualified Domestic Minimum Top-Up Tax for the purposes of the OECD Model Rules.
Article 8(2) of the Pillar Two Ordinance provides that if a foreign jurisdiction implemented Pillar Two rules using a turnover threshold lower than 750 Million Euros, this would also apply for the purposes of the Swiss Supplementary Tax.
The Swiss Supplementary Tax applies from January 1, 2024.
Allocation of Tax
The Pillar Two Ordinance follows the general allocation rules that are contained in the OECD Model Rules, but includes a specific adjustment to reflect the fact that Switzerland has a cantonal tax system and the Pillar Two minimum tax needs to be allocated between relevant cantons.
The general rule is that standard jurisdictional blending applies so that GloBE income and covered taxes of all entities within Switzerland are blended to determine the Swiss effective tax rate and whether any top-up tax is due.
For the purposes of the Swiss Supplementary Tax, it is then allocated to the entities in Switzerland based on the low-taxed entities share of the top-up tax payable.
Example
Company A is located in Canton 1 and has GloBE income of 1 million euros and a tax rate of 12.5%.
Company B is located in Canton 2 and has GloBE income of 1 million euros and a tax rate of 10%.
Company C is located in Canton 2 and has GloBE income of 1 million euros and a tax rate of 18%.
The total tax paid is 405,000 Euros and GloBE income is 3 million euros. Therefore jurisdictional effective tax rate is 13.5%. The top-up tax percentage is 1.5%.
As the Swiss Supplementary Tax uses the OECD Model Rules, the Substance-Based Income Exclusion also applies. If we assume the total substance-based income exclusion for Cantons 1 and 2 is 1.4 Million Euros (Company A =400,000, Company B=800,000 and Company C=200,000) , the total top-up tax is 1.5% * 1.6 Million = 24,000 euros.
This is then allocated to Company A and Company B (as Company C is not low-taxed) based on their share of the top-up tax payable (what the OECD Model Rules call the ‘Allocable Share’).
Company A has a top-up tax percentage of 2.5% and GloBE income (after the substance-based income exclusion) of 600,000 euros and top-up tax is therefore 15,000 euros.
Company B has a top-up tax percentage of 5% and GloBE income (after the substance-based income exclusion) of 200,000 euros and top-up tax is therefore 10,000 euros.
Therefore the 24,000 euros top-up tax payable is allocated 14,400 euros (10,000/25,000 * 24,000) to Company A with the remaining 9,600 euros to Company B.
Distribution Key
Article 12(3) of the Pillar Two Ordinance applies a special rule to a constituent entity that has permanent establishments (PE’s) or business operations in more than one canton. This is required as although a PE is a separate entity for Pillar Two purposes, the Model Rules apply the separate PE in the context of a PE of a foreign company.
This rule relates to the Swiss Supplementary Tax such that a Swiss Entity may be incorporated in one canton and have multiple PEs in different Cantons. In addition, PEs of Swiss entities are not usually required to prepare separate financial statements.
Therefore the Pillar Two Ordinance allocates any top-up tax between the cantons based on the distribution key as determined by the Federal Law on the Prohibition of Inter-Cantonal Double-Taxation.
Example (Cont’d)
If we assume that in the above example, Company A had a PE in Canton 3, and a distribution key was determined under the Federal Law on the Prohibition of Inter-Cantonal Double-Taxation allocating revenue to Canton 1 at 70% and Canton 3, 30%.
This would then also apply to allocate the top-up tax. As such the 14,400 euros top-up tax allocated to Company A would be split between 10,100 euros for the main entity in Canton 1 and 4,300 euros for the PE in Canton 3.
Deductibility of Top-Up Tax
Although, for corporate income tax purposes, income tax is usually tax deductible in Switzerland, Article 7 of the second Draft Decree provides GloBE top-up tax is not deductible for federal and cantonal profit taxes as a business-related expense.
Chapter 4 of the Pillar Two Ordinance provides for a Swiss Supplementary Tax, which is intended to be a QDMTT.
As with the IIR and UTPR, the OECD Model Rules are relied on. The Pillar Two Ordinance notes that they must be applied “by analogy”, since only the levying of the GloBE top-up tax is determined in the Model Rules.
It does, however, state that the interpretation of the model rules must be based on the accompanying commentary and on the relevant regulations (e.g. implementation framework) . This would therefore apply the Safe Harbours and the specific calculation features of a QDMTT from the OECD Administrative Guidance.
Accounting Standard
The GloBE Rules generally require the MNE Group to base its GloBE calculations on the accounts used for preparing the Consolidated Financial Statements of the UPE for the purposes of computing the GloBE Income or Loss of each Constituent Entity.
However, the definition of a QDMTT under the Model Rules expressly permits the calculations to be based on a Local Financial Accounting Standard.
Article 9(2) of the Pillar Two Ordinance provides that if the financial statements for all group entities in Switzerland for tax purposes are prepared under Swiss GAAP and are subject to an audit by an external auditor, the Swiss QDMTT must be calculated using Swiss GAAP.
If not all group entities in Switzerland meet these requirements, or if the financial years for which the annual financial statements are prepared do not correspond to the financial year according to Article 10.1 of the GloBE model rules, the Swiss QDMTT is calculated on the basis of the accounting standard used in under the GloBE Model Rules.
If the financial accounts are denominated in a foreign currency, the top-up tax amount must be converted into Swiss francs based on the average exchange rate for the tax period.
Push-Down Taxes
As provided in the OECD Administrative Guidance, CFC taxes are not pushed down when considering the QDMTT ETR under Article 2(2) of the Pillar Two Ordinance. Article 2(2) prohibits the pushdown of taxes for PEs, CFC’s, Hybrid entities, and also for taxes on distributions. This ties in with the Second Set of OECD Administrative Guidance.
However, as the Minimum Tax Ordinance transposes the OECD Model Rules and Commentary this is already provides by the definition of QDMTT in the February and July 2023 OECD Administrative Guidance. Therefore, this is proposed to be removed in the April 2025 Amended Ordinance.
Initial Phase of International Activity
The UTPR exclusion for MNEs in their initial phase of international activity does not need to be included in a QDMTT, however, it can be included. The Second Set of OECD Administrative Guidance provides jurisdictions with three options regarding the temporary UTPR exclusion in their QDMTT legislation.
Option one allows the jurisdiction not to adopt it.
Option two allows the jurisdiction to adopt it but limits it to cases where no Parent Entity is required to apply a Qualified Income Inclusion Rule with respect to Constituent Entities of an MNE Group located in the QDMTT jurisdiction.
Option three allows the jurisdiction to adopt it without any limitations. (Note, if a jurisdiction opts for Option three, for the purposes of the QDMTT Safe Harbour the Switch-Over Rule would apply).
Switzerland applies Option two under Article 8(4) of the Pillar Two Ordinance.
Other
A QDMTT is not required to include a substance-based income exclusion (SBIE). However, if it does have one it can’t have a wider scope than under the GloBE rules. The Federal Council will not be excluding the SBIE from the QDMTT calculation.
The deductible limit for fines and penalties is to be 50,000 euros (the same level as under the IIR/UTPR calculation).
Whilst the OECD Model GloBE Rules govern the level and collection of the IIR and the UTPR for joint ventures (in Article 6.4), they leave open how the QDMTT for joint ventures is to be calculated and levied. As such, Article 4 of the Pillar Two Ordinance provides that joint ventures and their subsidiaries are to be treated as separate groups for the purposes of calculating QDMTT. As required under the QDMTT rules, the Swiss QDMTT is 100% of the top-up tax ignoring any minority interests.
Article 19 of the Pillar Two Ordinance states that entities subject to the IIR/QDMTT are required to register by the filing deadline for the GloBE Information Return.
The Pillar Two Ordinance provides that the filing deadline for the GloBE Information Return will be the standard 15 months following the end of the fiscal year (18 months in the first year).
As the GloBE rules apply a jurisdictional blending approach, one entity per group of companies is taxable in Switzerland and one canton will undertake the assessment for the entire group of companies. It refers to this as the ‘one-stop shop’.
That canton then collects the top-up tax and distributes it to both the federal agency and other cantons. This brings considerable administrative simplification. In order to minimize the collection risk, the Federal Council introduces joint liability for all entities of a group of companies in Switzerland.
An electronic portal is to be used for the one-stop shop procedure. This is to be available from January1, 2025.
Article 27 of the Pillar Two Ordinance provides that payment of top-up tax must be made by the deadline for filing the GloBE Information Return.
On April 30, 2025, the Swiss Federal Council issued a proposal to amend the Minimum Tax Ordinance to provide for the procedure for submitting the GloBE Information Return (‘GIR’) to the Federal Tax Administration (FTA), the international exchange of the GIR by the FTA, and its use by the cantons.
An amendment to Article 17 of the Ordinance provides that there are to be two information systems: one at a cantonal level (the ‘supplementary tax information system) and one based on the OECD GIR (the GIR information system).
This provides for the obligation to submit the GIR which is based on the standard rules in Articles 8.1.4 to 8.1.6 of the OECD Model GloBE Rules and other OECD Guidance. This includes the January 2025 OECD GIR Guidance and exchange of information provisions, including the XML Schema.
The approach is that every Constituent Entity located in Switzerland will have an obligation to file a GIR in Switzerland. However, this obligation can be discharged if the GIR is filed by:
-The Ultimate Parent Entity,
-A Local Filing Entity; or
-The Designated Filing Entity.
Where the GIR is being filed by either the Ultimate Parent Entity or the Designated Filing Entity, the Constituent Entity, must file a notification with the Revenue.
The notification must contain:
-Details of the entity that is filing the GIR, and
-The jurisdiction in which such an entity is located.
Where the GIR is filed by the Designated Local Entity it needs to outline the Constituent Entities that it is filing on behalf of.
Both the GIR and associated notifications must be filed no later than 15 months after the end of the fiscal year (with an 18-month deadline for the Transition Year).
Penalties
Article 29 of the Pillar Two Ordinance provides that failure to submit a GloBE Information Return can result in a penalty of between 1,000 francs, and 10,000 francs.
In 2025 OMTax was launched. In-scope groups can now register in OMTax and make top-up tax returns.
Registration and filing returns is electronic via the government OMTax platform. Users are required to login to access the platform (In order to register a taxable constituent entity, the user must have a personal user account in the ePortal (https://eportal.admin.ch)). There is a test environment and a number of training materials for registration and return submissions
OMTax
| Switzerland | |||
|---|---|---|---|
| Effective Date: | Accounting periods beginning on or after December 31, 2023 | ||
| Section/Article | |||
| First Set of OECD Administrative Guidance | |||
| 1.1 | Rebasing monetary thresholds in the GloBE Rules | Transposed – Article 2 | |
| 1.2 | Deemed consolidation test | Transposed – Article 2 | |
| 1.3 | Consolidated deferred tax amounts | Transposed – Article 2 | |
| 1.4 | Sovereign wealth funds and the definition of Ultimate Parent Entity | Transposed – Article 2 | |
| 1.5 | Clarifying the definition of ‘Excluded Entity’ | Transposed – Article 2 | |
| 1.6 | Meaning of ancillary for Non-Profit Organisations | Transposed – Article 2 | |
| 2.1 | Intra-group transactions accounted at cost | Transposed – Article 2 | |
| 2.2 | Excluded Equity Gains or Loss and hedges of investments in foreign operations | Transposed – Article 2 | |
| 2.3 | Excluded Dividends- Asymmetric treatment of dividends and distributions | Transposed – Article 2 | |
| 2.4 | Debt release Election | Transposed – Article 2 | |
| 2.5 | Accrued Pension Expenses | Transposed – Article 2 | |
| 2.6 | Covered Taxes on deemed distributions | Transposed – Article 2 | |
| 2.7 | Excess Negative Tax Carry-forward guidance | Transposed – Article 2 | |
| 2.8 | Substitute Loss carry forwards | Transposed – Article 2 | |
| 2.9 | Equity Gain or loss inclusion election | Transposed – Article 2 | |
| 2.9 | Qualified Ownership Interest/Flow through entity | Transposed – Article 2 | |
| 2.1 | Allocation of taxes arising under a Blended CFC Tax Regimes | Transposed – Article 2 | |
| 3.1 | Application of Taxable Distribution Method Election to Insurance Investment Entities | Transposed – Article 2 | |
| 3.2 | Exclusion of Insurance Investment Entities from the definition of Intermediate Parent Entity and Partially-Owned Parent Entity | Transposed – Article 2 | |
| 3.3 | Restricted Tier 1 Capital | Transposed – Article 2 | |
| 3.4 | Liabilities related to Excluded Dividends and Excluded Equity Gain or Loss from securities held on behalf of policyholders | Transposed – Article 2 | |
| 3.5 | Simplification for Short-term Portfolio Shareholdings | Transposed – Article 2 | |
| 3.6 | Application of Tax transparency election to Mutual insurance companies | Transposed – Article 2 | |
| 4.1 | Deferred tax assets with respect to tax credits under Article 9.1.1 | Transposed – Article 2 | |
| 4.2 | Applicability of Article 9.1.3 to transactions similar to asset transfers | Transposed – Article 2 | |
| 4.3 | Asset carrying value and deferred taxes under 9.1.3 | Transposed – Article 2 | |
| Second Set of OECD Administrative Guidance | |||
| 1 | Currency conversion rules | Transposed – Article 2 | |
| 2 | MTTCs | Transposed – Article 2 | |
| 3 | SBIE Rules | ||
| – Foreign rules | Transposed – Article 2 | ||
| Stock-based compensation election | Transposed – Article 2 | ||
| Leases | Transposed – Article 2 | ||
| – Impairment losses inc in tangible asset value | Transposed – Article 2 | ||
| 4.1 | QDMTT Safe Harbour | Transposed – Article 2 | |
| 4.2 | UTPR Safe Harbour | Transposed – Article 2 | |
| Third Set of OECD Administrative Guidance | |||
| 1 | Transitional CbCR – Purchase Accounting Adjustments (consistent reporting condition, goodwill impairment adjustment) | ||
| 2.2.1 | Transitional CbCR – JVs | ||
| 2.3.1 | Transitional CbCR – Same Financial Statements/Local Financial Statements for Statutory Reporting | ||
| 2.3.2 | Transitional CbCR – Using different accounting standards | ||
| 2.3.3 | Transitional CbCR – Adjustments to Qualified Financial Statements/Dividend Mismatches | ||
| 2.3.4 | Transitional CbCR – MNEs not required to file CbC Reports | ||
| 2.3.5 | Transitional CbCR – Qualified Financial Statements for PEs | ||
| 2.4.2 | Transitional CbCR – Treatment of Taxes on income of PEs, CFCs, and Hybrid Entities | ||
| 2.6 | Transitional CbCR – Treatment of hybrid arbitrage arrangements | ||
| 3.1 | Identifying Consolidated Revenue | ||
| 3.2 | Mismatch between Fiscal Years of the UPE and another Constituent Entity | ||
| 3.3 | Mismatch between Fiscal Year and Tax Year of Constituent Entity | ||
| 4.2.1 | Blended CFCs -multiple GloBE Jurisdictional ETRs | ||
| 4.2.2 | Blended CFCs – not required to calculate an ETR | ||
| 4.2.3 | Blended CFCs – income of non-GloBE Entities | ||
| 5.3 | 30 June 2026 Filing deadline | ||
| 6 | NMCE Simplified Calcs | ||
| Fourth Set of OECD Administrative Guidance | |||
| 1.2.1 | Aggregate DTL Category basis | ||
| 1.2.1 | Exclusion of certain types of GL accounts and separate tracking | ||
| 1.2.1 | Exclusion of GL accounts that generate standalone DTAs | ||
| 1.2.1 | Exclusion of swinging accounts and separate tracking | ||
| 1.2.2 | FIFO/LIFO Basis | ||
| 1.2.3 | Aggregation of Short-term DTLs | ||
| 1.2.2 | Reversal of DTLs that accrued before the Transition Year | ||
| 1.2.2 | 5 year unclaimed accrual election | ||
| 2.1.2 | Recalculated deferred tax where GloBE carrying value differs from accounting carrying value | ||
| 2.1.2 | GloBE and accounting carrying values and the Transition Rules | ||
| 2.1.2 | Additional provisions for Intragroup transactions accounted for at cost | ||
| 2.1.2 | Exclusion of GloBE carrying value from SBIE | ||
| 3.1.3 | General rules for allocating cross-border, current taxes under a cross-crediting corporate tax system: 4 Steps | ||
| 3.1.3 | Specific rules for foreign PEs/CFCs, Hybrids/rev hybrids with domestic source income | ||
| 3.1.3 | Cross-crediting between Permanent Establishments and distributions from foreign subsidiaries | ||
| 4.1 | Extension of the Substitute Loss Carry-forward DTA to PEs, hybrids and rev hybrids | ||
| 4.2 | Allocation of deferred tax expenses and benefits from a Parent Entity to a CFC, PE Hybrid or Rev Hybrid: 5 step process | ||
| 4.2.2 | Five-Year Election to exclude the allocation of all deferred tax expenses and benefits to CFCs, PEs, Hybrids and Rev Hybrids | ||
| 4.2.3 | Exclusion of deferred tax assets or liabilities arising under a Blended CFC regime from transition rules | ||
| 5.2.2 | Determining GloBE status when a Flow-through Entity is held directly by another Flow-through Entity | ||
| 5.3.2 | Non-group owners: Partially owned Flow-through Entities | ||
| 5.3.5 | Non-group owners: Indirect minority ownership | ||
| 5.4.2 | Taxes allocated to a flow-through entity | ||
| 5.5.2 | Hybrid entities – Taxes pushed down include indirect owners | ||
| 5.5.4 | Hybrid entities – Entities located in jurisdictions without a Corporate Income Tax system | ||
| 5.6.2 | Extension of taxes pushed down to include Reverse Hybrids | ||
| 6.1.4 | Option to exclude a Securitization Entity from scope of QDMTT | ||
| 6.1.4 | Option to not impose top-up tax liabilities on SPVs used in securitization transactions | ||
| 6.1.4 | Amendments to the Switch-Off rule | ||
| 6.1.4 | New definition: Securitization Entity | ||
| 6.1.4 | New definition: Securitization Arrangement | ||
| January 2025 OECD Administrtive Guidance | |||
| 1 | Articles 8.1.4 and 8.1.5 | ||
| 1 | Amendments to CbCR Safe Harbour for 9.1 | ||
| 1 | Amendments to QDMTT Safe Harbour for 9.1 | ||
| 1 | Article 9.1 of the GloBE Rules | ||
| 1 | Central Record of Legislation with Transitional Qualified Status |
| Note | Switzerland | |
|---|---|---|
| QDMTT?(Enacted/Draft) | Is there a QDMTT in the Legislation? | Yes – Enacted |
| Effective Date: | Accounting Periods beginning on or after January 1, 2024 | |
| Administrative Guidance/Safe Harbour Guidance? | Are the provisions of the OECD Administrative Guidance and Safe Harbour Guidance reflected in the current legislation? | Transposed into domestic law. |
| Separate/Transposed QDMTT | Is the QDMTT a Separate QDMTT or a Transposition of the GloBE Rules (with Amendments) | Transposed |
| Domestic Groups | A QDMTT can also apply to purely domestic groups. | Yes – Under Article 8 the QDMTT applies to any UPE jurisdiction |
| Scope Definitions | The definitions of Ultimate Parent Entity, MNE Group, and Constituent Entity correspond with the definitions in the GloBE Rules. | Yes – Transposed Note: Under Article 8, if a lower threshold for the consolidated annual turnover applies in the tax jurisdiction of the ultimate parent company of a group of companies, the profits of their business units belonging to Switzerland for tax purposes are also subject to the Swiss supplementary tax. |
| Income and covered taxes of Constituent Entities | The QDMTT must compute the tax liability for the jurisdiction by taking into account the income and covered taxes of Constituent Entities under the GloBE Rules. | Yes – Transposed under Article 2 |
| Separate ETRs | A QDMTT must determine a separate ETR and Top-up Tax amount for MOCEs, Joint Ventures and JV Subsidiaries. | Yes – Transposed under Article 2 |
| Charging | A QDMTT must impose a Top-up Tax on one or more domestic Constituent Entities on the Excess Profits of all domestic Constituent Entities, including the domestic Parent Entity. | Yes – Transposed under Article 2 |
| Enforceability | The legal liability for the domestic top-up tax needs to be enforceable against at least one Constituent Entity in the jurisdiction. | Yes – Jointly severable under Article 6 |
| Different Accounting Standard? – Optional | Is the use of a local accounting standard optional? | No |
| Different Accounting Standard? – Mandatory | Is the AG2 guidance followed? | Yes – Article 9 (AG2 local accounting standard rule) |
| Different Accounting Standard? – Default GloBE rules | Do the general GloBE rules apply for the QDMTT accounting standard? | No |
| Require 100% ownership? | The QDMTT )can require 100% ownership | No |
| Differences to GloBE Rules: tighter restriction is consistent with local tax rules | The QDMTT can be more restrictive than the GloBE Rules where the tighter restriction is consistent with local tax rules. | None |
| Differences to GloBE Rules: Not relevant to in the context of its domestic tax system | The QDMTT can exclude adjustments that are not relevant to in the context of its domestic tax system. | None |
| Income/Loss of a PE | The QDMTT must exclude the income or loss of a foreign Permanent Establishment from the income or loss of the Main Entity. | Yes – Transposed under Article 2 |
| Tax Transparency | A QDMTT must include certain tax transparent provisions. | Yes – Transposed under Article 2 |
| Adjusted Covered Taxes Consistency | The range of taxes included in Covered Taxes needs to be the same or narrower, as under the GloBE rules. | Yes – Transposed under Article 2 |
| GloBE Loss Election? | Not Required in QDMTT | Yes – Transposed under Article 2 |
| No Pushdown to CFC or PE | A QDMTT must exclude: (1) tax paid or incurred by a Constituent Entity-owner under a CFC Tax Regime that is pushed down to a domestic Constituent Entity in the GloBE Rules and (2) tax paid or incurred by a Main Entity that is allocated to a PE in the jurisdiction. | Yes – Article 2. It is assumed, however, that the QDMTT liability would be credited against the CFC tax in foreign jurisdictions. Whilst this is left to each state’s domestic tax, if this was not the case there could be double taxation. The Federal Council will observe how other countries react to this and will examine whether a possible regulation is also suitable for Switzerland. |
| Exclude tax allocated to Hybrids | Second AG Guidance | Yes – Article 2 |
| Exclude allocated net basis tax on dividends (except WHT) | Second AG Guidance | Yes – Article 2 |
| UPE that is a Flow-Through Entity | Second AG Guidance | Yes – Transposed under Article 2 |
| UPE subject to Deductible Dividend Regime | Second AG Guidance | Yes – Transposed under Article 2 |
| Eligible Distribution Tax Systems | Second AG Guidance | Yes – Transposed under Article 2 |
| ETR Computation for Investment Entities | Second AG Guidance | Yes – Transposed under Article 2 |
| Investment Entity Tax Transparency Election | Second AG Guidance | Yes – Transposed under Article 2 |
| Taxable Distribution Method Election | Second AG Guidance | Yes – Transposed under Article 2 |
| Multi-Parented MNE Groups | Second AG Guidance | Yes – Transposed under Article 2 |
| Additional Top-Up Tax/Excess Negative Tax Expense | A QDMTT needs to have provisions for additional top-up tax where there is no Net GloBE Income and the Adjusted Covered are less than zero and less than the Expected Adjusted Covered Taxes. Amount. Excess Negative Tax Carry-forward rules also need to be in place. | Yes – Transposed under Article 2 |
| Modified Top-Up Tax Formula | The QDMTT top-up tax formula needs to be modified as the GloBE Rules subtract tax paid under a QDMTT from the current GloBE Top-up Tax. | Not Provided |
| Same Approach As GloBE Rules | A QDMTT must require that top-up tax is taken into account by the relevant Constituent Entity at the same time and in the same manner as under the GloBE Rules (eg it can’t be carried forward). | Yes – Transposed under Article 2 |
| SBIE Included? | Not Required in QDMTT | Yes, SBIE Applies |
| SBIE Rates same as GloBE? | Not Required in QDMTT | Yes |
| De Minimis Rule Included? | Not Required in QDMTT | Yes |
| Restructuring Rules? | A QDMTT needs to include restructuring rules as provided in the GloBE rules to the extent necessary to conform to the tax reorganization rules in the jurisdiction. | Yes – Transposed under Article 2 |
| Safe Harbours? | A QDMTT needs to contain GloBE safe harbours. | Yes – Transposed under Article 2 |
| Deferred Tax Transition Rule? | A QDMTT must include the deferred tax starting point under Article 9.1.1 of the Model Rules. | Yes – Transposed |
| SBIE Transitional Rates? | Not Required in QDMTT | Yes – Transposed |
| Initial Phase of International Activity Exemption | Not Required in QDMTT | Yes – Transposed – where no Parent Entity is required to apply a Qualified Income Inclusion Rule |
| Elections? | Where the GloBE Rules permit an election, a QDMTT must generally also provide for the election and require the MNE Group to make the same election under the QDMTT as is made under the GloBE Rules. | Yes – Transposed |
| Deferred Tax transition: First time or refreshing rule? | Second AG | None |
| New transition year – amend tax attributes? | Second AG | None |
| Currency provisions? | Second AG | Second AG Guidance not followed |
| DTL Recapture rules – Aggregate DTL Categories | Fourth AG, 1.2.8 | |
| DTL Recapture rules Unclaimed Accrual Five-Year Election | Fourth AG, 1.2.8 | |
| Reverse Hybrid Pushdown | Fourth AG, 5.6.2 | |
| Securitization Entities – A QDMTT may also exclude a Securitisation Entity from its scope | Fourth AG, 6.1.4 | |
| Securitization Entities – A jurisdiction may allocate the QDMTT liability for any QDMTT top-up tax to another Constituent Entity (if any) that is located in the jurisdiction | Fourth AG, 6.1.4 | |
| Note |
| Switzerland | ||
|---|---|---|
| Effective Date: | Accounting periods beginning on or after December 31, 2023 | |
| Section/Article | ||
| Safe Harbour & Penalty Relief Guidance | De Minimis Test | Transposed under Article 2(3) |
| Safe Harbour & Penalty Relief Guidance | Simplified ETR Test | Transposed under Article 2(3) |
| Safe Harbour & Penalty Relief Guidance | Routine Profits Test | Transposed under Article 2(3) |
| Safe Harbour & Penalty Relief Guidance | Simplified Covered Tax defn (inc exclusion of uncertain tax positions) | Transposed under Article 2(3) |
| Safe Harbour & Penalty Relief Guidance | Simplified ETR defn | Transposed under Article 2(3) |
| Safe Harbour & Penalty Relief Guidance | Transition Period | Transposed under Article 2(3) |
| Safe Harbour & Penalty Relief Guidance | Transition Rate | Transposed under Article 2(3) |
| Safe Harbour & Penalty Relief Guidance | Defn of Qualified Financial Statements | Transposed under Article 2(3) |
| Safe Harbour & Penalty Relief Guidance | Special Rule for Joint Ventures | Transposed under Article 2(3) |
| Safe Harbour & Penalty Relief Guidance | Special Rule for Tax Neutral UPEs | Transposed under Article 2(3) |
| Safe Harbour & Penalty Relief Guidance | Special Rules for Investment Entities and their Constituent Entity-owners | Transposed under Article 2(3) |
| Safe Harbour & Penalty Relief Guidance | Special Rule for Net Unrealised Fair Value Loss | Transposed under Article 2(3) |
| Safe Harbour & Penalty Relief Guidance | Exclusions | Transposed under Article 2(3) |
| December 2023 OECD Administrative Guidance | ||
| 1 | Transitional CbCR – Purchase Accounting Adjustments(consistent reporting condition, goodwill impairment adjustment) | Transposed under Article 2(3) |
| 2.2.1 | Transitional CbCR – JVs | Transposed under Article 2(3) |
| 2.3.1 | Transitional CbCR – Same Financial Statements/Local Financial Statements for Statutory Reporting | Transposed under Article 2(3) |
| 2.3.2 | Transitional CbCR – Using different accounting standards | Transposed under Article 2(3) |
| 2.3.3 | Transitional CbCR – Adjustments to Qualified Financial Statements/Dividend Mismatches | Transposed under Article 2(3) |
| 2.3.4 | Transitional CbCR – MNEs not required to file CbC Reports | Transposed under Article 2(3) |
| 2.3.5 | Transitional CbCR – Qualified Financial Statements for PEs | Transposed under Article 2(3) |
| 2.4.2 | Transitional CbCR – Treatment of Taxes on income of PEs, CFCs, and Hybrid Entities | Transposed under Article 2(3) |
| 2.6 | Transitional CbCR – Treatment of hybrid arbitrage arrangements | Transposed under Article 2(3) |
| January 2025 OECD Administrtive Guidance | ||
| Amendments to CbCR Safe Harbour for 9.1 |
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