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Parliament approves combined corporate tax and pensions bill

Parliament approves combined corporate tax and pensions bill

The Swiss parliament has approved an ambitious government bill aiming to combine the contentious issue of corporate tax reform with changes to the pension system. The package could yet come to a nationwide vote in 2019.

The repackaged bill was drawn up after Swiss voters threw out an initial plan for a sweeping reform of corporate tax in the country in 2017, judging it to be too generous to business interests.

Switzerland has come under intense pressure from the European Union (EU) and the Organisation for Economic Cooperation and Development (OECD) to change “harmful” tax practices in the existing tax regime.

The current idea proposed by the government, approved by the Senate on Monday, makes various concessions both to right- and left-wing concerns, and notably includes a significant reform to the pension system – another issue high on the Swiss political agenda.

The major linkage is that for each franc that the Swiss state or cantons “lose” due to the reform of corporate tax, a concessionary franc will be paid them by way of the first pillar, which deals with pensions and social assistance.