Strong finances: Zug votes on forward-looking tax package!

Strong finances: Zug votes on forward-looking tax package!

On November 30th, the canton of Zug will decide on an important change to the tax law, and discussions about the tax package are already in full swing. How Nah reports, Gregor Bruhin, Zug SVP cantonal councilor and entrepreneur, is passionately supporting the proposal. He sees the tax package as a decisive advantage for all citizens of the canton and emphasizes that it is necessary to reduce the tax burden on families, medium-sized businesses and companies.

It is clear that Zug is an attractive location for both residents and companies. Bruhin emphasizes that the canton's healthy financial situation, strong economy and high quality of life should be maintained. The tax package contains targeted improvements, including relief for child deductions and higher deductions for health insurance premiums as well as support for pensioners.

OECD minimum tax as a challenge

A central aspect of the debate is the upcoming introduction of the OECD minimum tax. From 2024, a global minimum tax of 15 percent will be introduced for large international companies. This could affect the attractiveness of Switzerland, especially the canton of Zug, as stated in the Zug news is to be read. In order to overcome this challenge, the government council of the canton of Zug plans to invest the additional income generated by the minimum tax, expected to be around 200 million francs per year, in social measures, sustainable infrastructure and innovation projects.

The agenda includes needs-based childcare offerings, higher cantonal contributions to private schools and investments in housing. Innovative projects such as the Blockchain Zug Joint Research Initiative and the ETH Learning Factory Zug should also be supported in order to secure the canton's competitive position.

Impact on multinational companies

The Federal Council has also decided to levy the supplementary tax domestically from January 1, 2024, while the international supplementary tax IIR and UTPR will not come into force for the time being. An important component for multinational companies is country-by-country reporting (CbCR), which has been valid in Switzerland since 2017 and is intended to contribute to tax transparency. How BDO explains, companies must ensure that their data meets the requirements of qualified financial statements in order to benefit from the new regulations.

Bruhin sees a no to the tax package as a step backwards that could weaken the canton of Zug. In contrast, a yes vote is seen as a responsible step to strengthen the business location. The pressure to make the location attractive while at the same time mastering the social and economic challenges remains high.

The consultation on the bill will continue until September 15, 2024, before the new “Law on Location Development” and the corresponding regulations are due to come into force on January 1, 2026. The canton of Zug is therefore facing crucial decisions that will have a significant impact on its future as a business location.