No good news for the EU this Sunday from the Switzerland. Swiss voters overwhelmingly rejected plans to abandon the corporate tax system, leaving startled government in a stalemate confronted with the Europeans critics, attempting to convince rich neighbours to stop the regime of record low tax rates for thousands of multinational companies enjoying tax ‘haven’.
Switzerland agreed with the Organisation for Economic co-operation and development (OECD) in 2014 to change by 2019 the special status, which has been a beacon of attraction for around 24,000 multinationals searching to maximize profits through minimising tax payments. That provision will now remain in place past the original deadline.
Most Swiss voters recognized the country needs reform to avoid being blacklisted as a low-tax pariah. But new measures proposed to help companies offset the loss of their special status had created deep divisions.
Just over 59% of referendum participants – who have the last word under the Swiss system of direct democracy – opposed the plans, which the country’s political and business elite succumbed under international pressure.
The ‘no’ voters took into consideration the opportunity to employ 150,000 staff and contribute half of federal corporate taxes due to this special tax status.