Tax reform and AHV financing: now the cantons are following suit

The new corporate taxation regimes are to be introduced on January 1, 2020. Various cantons still have to do their homework.

Following the adoption of the Federal Act on Tax Reform and AHV Financing (TRAF) by Swiss voters on May 19, 2019, the legislative process at cantonal level is in full swing. As the federal bill will come into force on January 1, 2020, meaning that privileged status companies will be definitively abolished, the cantons are under pressure to act. If they are unable to push through their proposed legislation by the time the TRAF comes into force, they will have to introduce at least a transitional arrangement by means of an "emergency law", i.e. a decision by the cantonal government. Otherwise, the tax harmonization law (with the new TRAF provisions) would be directly applicable.

The following cantons have already amended their tax laws and will introduce them - at the latest - on 1.1.2020:

• Basel-Stadt

• Freibourg

• Geneva

• Glarus

• Neuchâtel

• St. Gallen

• Vaud

Individual cantons (Bern, Solothurn) have to go back to the drawing board after their first implementation proposals were rejected at the ballot box and have already drawn up modified legislative projects. However, together with Aargau and Ticino, for example, they will not be able to vote on this until 2020.

Baselland is among the other cantons that are trying to get the projects through in 2019 so that they can be implemented seamlessly by the deadline of January 1, 2020. As the bill did not achieve the required quorum in the cantonal parliament, it must be put to a popular vote. This will take place on November 24, 2019.