Introducing an IP license box in Switzerland: quantifying the effects

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. In response to mounting international pressure to reform the ring-fenced elements of its tax system, the Swiss government has put forward a comprehensive tax reform package. The proposal comprises the introduction of a license box, a substantial reduction in cantonal prot tax rates, and an allowance for excess corporate equity. We apply a computable general equilibrium model to quantify the economic eects of this reform. Our results reveal that the license box, combined with the reduction in the cantonal prot taxes, limits the outow of the tax base of those companies that benet from the current preferential tax treatment. The reduction in cantonal prot taxes and the fact that regularly taxed companies additionally benet from the license box render the reform package costly, such that tax revenues might well decline after the reform. Terms of use: Documents inJEL Classication: H25, H32, C68.

Switzerland: Selected Issues

“…Analyzing tax neutrality between legal forms (corporate vs. individual) in Switzerland involves detailed analysis since it depends on each canton's personal income tax schedule, CIT, net worth taxes, and social security contributions, inter alia. Therefore, a detailed coverage of this issue is beyond the scope of this paper.17 Switzerland levies a one-time federal stamp duty (of 1 percent) on the issuance of corporate equity.18 The expected budgetary cost of Tax Proposal 17 is lower than the reform proposal rejected in 2017(Chatagny et al, 2017), which foresaw, inter alia an ACE.©International Monetary Fund. Not for Redistribution…”