Driver 7: taxation

The minimum tax and cantonal competition

The seventh driver is taxation, a field in which the Swiss federal order gives the cantons wide autonomy and the voters the last word. Chapter H.V described the position of Zurich within this system. The canton taxes corporate profits at an effective rate of about 19.5 per cent in the city. Its electorate refused a further cut in the profit tax rate on 18 May 2025. The OECD minimum tax, implemented through a national supplementary tax from 2024 and an international supplementary tax from 2025, has changed the terms of cantonal competition for large groups. A study by Deloitte of April 2026 found that the fifty largest listed Swiss groups would pay CHF 563.8 million in supplementary taxes for 2025, double the amount of the previous year. Pharmaceutical and financial groups accounted for ninety per cent of the total and two companies for three-quarters. Deloitte observed that several cantons had raised tax rates and introduced subsidies for research to compensate for the share of the revenue that goes to the Confederation. It also warned that special treatment of American groups by other states placed Swiss companies at a disadvantage and called for a fourth corporate tax reform.¹

The minimum tax, which will remain in force in some form until 2035, narrows the gap between Zurich and the low-tax cantons for groups within its scope. For smaller companies, for individuals and for the location decisions of wealthy families, cantonal competition continues. Zurich competes with Zug, Schwyz and Lucerne on income and wealth taxes, and Chapter K.II has shown how much this matters for German entrepreneurs. The critical uncertainty lies in whether the international order of the minimum tax holds together. A fragmentation of the regime after the American withdrawal from the global framework would reopen the field for tax competition among states.² A consolidation would further reduce the weight of tax rates in location decisions and increase that of infrastructure, talent and legal certainty.

Wealth, inheritance and the household

For private clients, the most important tax question of the decade was answered for the time being on 30 November 2025. The voters rejected the initiative of the Young Socialists for a federal tax of fifty per cent on estates and gifts above CHF 50 million by 78.3 per cent.³ Chapter H.V has shown that the result confirmed the cantonal competence for inheritance taxation. During the campaign several prominent entrepreneurs nonetheless declared that they would consider leaving Switzerland if the initiative were accepted, a sign of how sensitive mobile wealth is to the mere possibility of a federal inheritance tax.⁴ With annual inheritances of about CHF 100 billion and a growing concentration of wealth, the debate will return in some form before 2035, whether as a proposal for a federal inheritance tax, as a reform of the wealth tax or as a debate on the privileged taxation of capital gains.

Two further votes have changed the taxation of households. On 28 September 2025 the voters approved the abolition of the imputed rental value on owner-occupied homes, which will take effect in 2028. On 8 March 2026 they approved the introduction of individual taxation by 54.23 per cent, which the cantons must implement by 1 January 2032 at the latest.⁵ The abolition of the imputed rental value removes the tax incentive to keep mortgages high and will influence the mortgage business of the domestic banks. Individual taxation will change the tax planning of married couples, particularly those with two incomes.

Sustainability and the constitution

A final tax-related uncertainty arises from the constitutional initiative “For a sustainable and future-oriented Swiss financial centre”. It would anchor ecological requirements for financial market participants in the Constitution, including bans on financing the extraction of fossil fuels, and create a new supervisory body with enforcement powers. On 12 August 2026 the Federal Council recommended its rejection. It argued that the Climate and Innovation Act and the climate reporting rules of 2024 already pursued the core aims and that Swiss-only prohibitions would shift business abroad. The Department of Finance must submit a dispatch by 16 April 2027.⁶ A popular vote can therefore be expected in 2028 or 2029. Its result will indicate whether Swiss voters want to define the moral limits of finance through the Constitution, a question with deep roots in Zurich’s history.

Notes

1. Deloitte Switzerland, media release on the OECD minimum tax impact study, 23 April 2026, https://www.deloitte.com/content/dam/assets-zone2/ch/de/docs/about/2026/deloitte-medienmitteilung-oecd-gmt-2026.pdf. ↩
2. The White House, memorandum “The Organization for Economic Co-operation and Development (OECD) Global Tax Deal (Global Minimum Tax)”, 20 January 2025, https://www.whitehouse.gov/presidential-actions/2025/01/the-organization-for-economic-co-operation-and-development-oecd-global-tax-deal-global-tax-deal/, section 1: “the Global Tax Deal has no force or effect in the United States”. U.S. Department of the Treasury, G7 statement of 28 June 2025, https://home.treasury.gov/news/press-releases/sb0181: “A side-by-side system would fully exclude U.S. parented groups from the UTPR and the IIR in respect of both their domestic and foreign profits.” ↩
3. blue News, “Erbschaftssteuerinitiative der Juso mit 78,3 Prozent Nein abgelehnt”, 30 November 2025, https://www.bluewin.ch/de/news/schweiz/erbschaftssteuerinitiative-der-juso-mit-78-3-prozent-nein-abgelehnt-li.2987116. ↩
4. Among them was the industrialist Peter Spuhler, owner of Stadler Rail, who told the SonntagsZeitung that the Juso were forcing him to emigrate and that he was considering a move to Austria: Swissinfo, “Erbschaftssteuer: Vertreibt eine Initiative die Superreichen aus der Schweiz?”, 31 July 2024, https://www.swissinfo.ch/ger/bundespolitik/erbschaftssteuer-vertreibt-eine-initiative-die-superreichen-aus-der-schweiz/84836825. ↩
5. RSM Switzerland, “Individualbesteuerung und Abschaffung des Eigenmietwerts”, https://www.rsm.global/switzerland/de/node/709. ↩
6. Federal Council, press release “Bundesrat lehnt Finanzplatz-Initiative ab”, 12 August 2026, https://www.admin.ch/de/newnsb/UtUmgvbslkTSiJR-gm31T. ↩

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 September 2025.