Switzerland Approves Implementation of Global Minimum Tax and BEPS 2.0 Project

June 27, 20230



Switzerland has taken a significant step towards implementing the global minimum tax and the Base Erosion and Profit Shifting (BEPS) 2.0 Project by approving a constitutional amendment in a public referendum on 18 June 2023. This landmark decision paves the way for the introduction of key measures to ensure fair taxation and combat tax avoidance by multinational enterprises (MNEs). The approved amendment empowers the Swiss government to adopt global anti-base erosion (GloBE) rules, including the domestic top-up tax, through an implementation ordinance. This article provides an overview of the latest developments, the key elements of the constitutional amendment, and the anticipated timeline for implementation.  




Switzerland has been actively working to implement the global minimum taxation framework agreed upon by the OECD/G20 Inclusive Framework. The constitutional amendment was necessary to align Swiss law with the requirements of the BEPS 2.0 Project, specifically addressing Pillar Two measures aimed at minimum taxation. The amendment enables Switzerland to introduce key provisions within the domestic legal framework.  


Key Elements of the Constitutional Amendment:  


The approved constitutional amendment provides the legal basis for the implementation of Pillar One and Pillar Two rules in Switzerland. While no concrete plans have been made for Pillar One, the transitional provision within the amendment allows the Swiss Federal Council to introduce Pillar Two rules through an ordinance until a permanent tax bill is enacted by the Swiss Parliament. The transitional provision aligns with the ambitious timeline set by the OECD, granting the Swiss government the necessary authority to swiftly implement Pillar Two measures.  

The transitional provision incorporates fundamental principles of Pillar Two, including the scope of application (MNEs with a consolidated annual turnover exceeding EUR 750 million), a minimum tax rate of 15%, calculation of the effective tax rate, and the consequences of a tax rate below the minimum threshold. These consequences involve levying a top-up tax through the Income Inclusion Rule (IIR), the Undertaxed Profits Rule (UTPR), and a domestic top-up tax known as the Qualified Domestic Minimum Top-up Tax (QDMTT).  


Implementation Timeline and Next Steps:  


Following the successful referendum, the Swiss Federal Council can proceed with the implementation of minimum taxation measures. The IIR and QDMTT are expected to be introduced for financial years beginning on or after 1 January 2024, aligning with the EU’s implementation timeline. On the other hand, the introduction of the UTPR is likely to follow international developments, with many states, particularly in the EU, expected to introduce it for business years beginning on or after 1 January 2025.  

The Swiss Federal Council has already released draft ordinances for public consultation, focusing on technical and procedural aspects of the Pillar Two implementation. The ordinances aim to ensure a smooth transition and provide clarity to multinational enterprises operating in Switzerland. Feedback from the public consultation will be considered before finalizing the ordinances.  




Switzerland’s approval of the constitutional amendment marks a significant milestone in the implementation of the global minimum tax and BEPS 2.0 Project. By embracing the Pillar Two measures, Switzerland demonstrates its commitment to fair taxation and aligning its tax framework with international standards. The successful referendum empowers the Swiss government to move forward with the adoption of necessary ordinances, which will pave the way for the introduction of the IIR, UTPR, and QDMTT. The implementation is expected to enhance legal certainty, minimize tax avoidance, and contribute to the ongoing efforts of the international community in creating a more equitable and sustainable global tax system. 

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