Some parts of Switzerland may soon become better corporate tax havens than the mother of all tax havens, Hong Kong.
The Swiss government is implementing a massive tax reform that could drop the tax burden in some Swiss cantons below 10 percent, according to a BAK Economics study reported by Bloomberg.
The national corporate tax rate in Switzerland is set to fall to about 13.5 percent from 16.8 percent in 2025 once its tax reforms are fully implemented, but individual cantons have control over taxation in their territory.
The corporate tax burden in Nidwalden canton could fall to 9.8 percent by 2025. The canton home to the Swiss capital of Bern has the highest rate in the country, but is still lower than London, Munich, Vienna, Paris, and Milan.
Hong Kong’s corporate tax rate has been 16.5 percent since 2008, when it was reduced from 17.5 percent, according to Trading Economics.
Taxes play a huge role in where companies and individuals base themselves. Tax reductions regularly attract a wave of companies and individuals looking to take advantage.
For example, Italy’s government implemented a flat income tax for new residents in the Tuscany region. The influx of new residents buying homes tightened up the local real estate market, sending prices upward. [Bloomberg] — Dennis Lynch