The OECD minimum tax in Switzerland

The constitutional basis and the ordinance

The second pillar of the OECD/G20 project on the taxation of the digital economy was agreed in October 2021. It requires large multinational groups to pay an effective tax of at least 15 per cent on their profits in every jurisdiction in which they operate. The Global Anti-Base Erosion (GloBE) model rules apply to groups whose consolidated revenue reached at least EUR 750 million in at least two of the four preceding years. They work through three mechanisms. A domestic minimum top-up tax is levied in the jurisdiction of the low-taxed entity, an income inclusion rule (IIR) lets the parent's jurisdiction collect the top-up tax, and an undertaxed profits rule (UTPR) allocates any remaining top-up tax to other jurisdictions in which the group operates.¹ Switzerland decided to implement the rules quickly so that the top-up tax on Swiss entities would be collected in Switzerland and not abroad.

Because the Federal Constitution requires equal treatment in taxation and does not allow a special rate for large groups by simple statute, the implementation needed a constitutional amendment. Swiss voters approved it on 18 June 2023 by 78.5 per cent, with all cantons in favour and a turnout of 41.9 per cent.² The new constitutional provision authorizes the Confederation to levy a supplementary tax on large groups and to regulate it by ordinance until a federal act replaces the ordinance within six years. It assigns 75 per cent of the receipts to the cantons in which the taxed entities are located and 25 per cent to the Confederation.³ The Federal Council then adopted the Minimum Taxation Ordinance (Mindestbesteuerungsverordnung, MinTV), which incorporates the OECD model rules, the commentary and the administrative guidance by reference.⁴

QDMTT from 2024, IIR from 2025, no UTPR

The Swiss supplementary tax has entered into force in stages. The qualified domestic minimum top-up tax (QDMTT), under which Switzerland collects the difference between the effective tax of Swiss entities and 15 per cent, applies from 1 January 2024. On 4 September 2024 the Federal Council decided to bring the IIR into force on 1 January 2025, so that Swiss parent companies also pay top-up tax on low-taxed foreign subsidiaries. It postponed the UTPR until further notice, because its revenue potential was low and because legal uncertainties and international developments, including the position of the United States, made it unattractive.⁵ The Federal Department of Finance estimated the initial revenue from the QDMTT at CHF 1 to 2.5 billion a year and that from the IIR at CHF 0.5 to 1 billion. It expected the first receipts in 2026, since the tax for 2024 is assessed with a delay.⁶

In January 2026 the Inclusive Framework agreed on a so-called side-by-side package. It exempts groups headquartered in jurisdictions with a qualifying domestic minimum tax regime, in particular the United States, from the IIR and the UTPR of other states and introduces new safe harbours. In April 2026 the Swiss Federal Tax Administration announced the dates from which the new safe harbours apply. The substance-based tax incentive safe harbour, the side-by-side safe harbour and the ultimate parent entity safe harbour may be applied to financial years beginning on or after 1 January 2026. The simplified effective tax rate safe harbour applies to years beginning on or after 31 December 2025. The transitional country-by-country reporting safe harbour remains available for financial years beginning no later than 31 December 2027.⁷ Parliament has also dealt with motions concerning the treatment of deferred tax assets created under cantonal transitional rules, which affect former status companies.

Notes

1. Federal Department of Finance, Implementation of the OECD minimum tax rate in Switzerland, 4 September 2024, https://www.efd.admin.ch/en/implementation-oecd-minimum-tax-rate-switzerland (threshold of EUR 750 million; QDMTT; IIR; UTPR). OECD, Tax Challenges Arising from the Digitalisation of the Economy – Global Anti-Base Erosion Model Rules (Pillar Two), Paris, 20 December 2021, Art. 1.1 (threshold), Art. 2.1–2.3 (IIR), Art. 2.4–2.6 (UTPR), Art. 10.1 (qualified domestic minimum top-up tax). ↩
2. Federal Department of Finance, "Implementation of the OECD minimum tax rate in Switzerland", https://www.efd.admin.ch/en/implementation-oecd-minimum-tax-rate-switzerland (78.5 per cent); IFC Review, "Switzerland: Swiss voters back minimum tax on multinational earnings", 19 June 2023, https://www.ifcreview.com/news/2023/june/switzerland-swiss-voters-back-minimum-tax-on-multinational-earnings/ (all cantons in favour; turnout 41.9 per cent). ↩
3. Federal Department of Finance (above) (75 per cent to the cantons, 25 per cent to the Confederation; ordinance to be replaced by a federal act within six years). ↩
4. Deloitte Switzerland, "Switzerland to introduce IIR in 2025 but not UTPR", 5 September 2024, https://www.deloitte.com/ch/en/services/tax/blogs/switzerland-to-introduce-iir-in-2025-but-not-utpr.html. Ordinance of 22 December 2023 on the Minimum Taxation of Large Groups of Companies (Minimum Taxation Ordinance, MinTV), SR 642.161; the incorporation of the OECD model rules by reference follows from Art. 2 MinTV. ↩
5. Deloitte Switzerland (above) (decision of 4 September 2024; UTPR postponed until further notice); Federal Department of Finance (above) ("comparatively low revenue potential"). ↩
6. Federal Department of Finance (above). ↩
7. KPMG, "Switzerland: Application of Pillar Two side-by-side package", TaxNewsFlash, 7 April 2026, https://kpmg.com/us/en/taxnewsflash/news/2026/04/switzerland--application-pillar-two-sbs-package.html (also referring to motions 25.4392 and 25.4399 on deferred tax assets). ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.