🇨🇭 Tax4 Sep 2024
Switzerland adds the income inclusion rule to its minimum tax from 2025
On 4 September 2024 Switzerland's Federal Council decided to bring the income inclusion rule (IIR), the international supplementary tax under Pillar Two, into force on 1 January 2025. Swiss parent companies of large groups pay top-up tax where their foreign subsidiaries are taxed below 15%. Switzerland is not applying the undertaxed profits rule for now.
Switzerland introduced its domestic minimum tax from 2024 but held back the international rules while it watched developments abroad.
What changed
- The income inclusion rule (international supplementary tax) applies from 1 January 2025.
- A Swiss parent of a group with revenue of at least EUR 750 million pays top-up tax on low-taxed profits of its foreign subsidiaries.
- The amended ordinance followed in November 2024.
- The undertaxed profits rule is not in force in Switzerland.
Who is affected
Swiss-headquartered groups and their tax teams.