What is the OECD minimum tax?
The Organisation for Economic Co-operation and Development (OECD) minimum tax, introduced on 1 January 2024, is a new global tax standard agreed by around 140 states, including Switzerland. It requires a minimum tax rate of 15% to be applied to profits of multinational enterprises.
Who is affected?
The minimum tax results in a higher tax bill for large companies in many cantons, which previously had lower tax rates. Nothing has changed for all other, smaller companies. Implementing the tax in Switzerland required an amendment to the Constitution.
This also affects the financial centre. The banks support the introduction of the OECD minimum tax despite the increased tax burden. It ensures that other states are not allowed to levy any additional taxes on profits generated in Switzerland.
The companies concerned must of course pay the minimum tax, but Swiss implementation means that the resulting tax revenue remains in Switzerland.
How does the OECD minimum tax work?
It works on a two-pillar system.
Pillar One covers the cross-border profits of companies with total revenues of more than EUR 20 billion and a profit margin of more than 10%.
For example, a company based in one country (Country A) can be taxed in another (Country B) on the profits it makes there, even if it has no physical presence in that country. This does not apply to conventional banking activities, but questions concerning the scope remain, for example with regard to the definition of a “regulated financial service”.
Pillar Two concerns cross-border profits of companies with total revenues of more than EUR 750 million. They should in principle pay at least 15% tax on their profits. The frameworks are being continually refined at the international level, in particular through the OECD’s Commentaries, Administrative Guidance and safe harbour rules.
Legal implementation of Pillar Two in Switzerland
On 18 June 2023, the Swiss electorate voted in favour of a change to the Constitution that created the basis for implementing the minimum tax in Switzerland. One aim was to ensure that the revenues from this higher taxation remain in Switzerland rather than flowing to other countries.
A new transitional provision in the Constitution provides the Federal Council with a framework for implementing the minimum tax, which it decided to do initially by introducing a national top-up tax with effect from 1 January 2024. In September 2024, the Federal Council decided that it would also introduce an international top-up tax under the Income Inclusion Rule (IIR) with effect from 1 January 2025. Switzerland has chosen not to adopt the Under-Taxed Payments Rule (UTPR). The legal basis is the Ordinance on the Minimum Taxation of Large Corporate Groups (OMinT), which remains in force until replaced by a federal act that the Federal Council must present to the Swiss Parliament by the end of 2029 at the latest.
On 30 April 2025, the Federal Council opened a consultation on amendments to the OMinT. These are intended to ensure that the Swiss implementation of Pillar Two is continually adapted in line with international developments and practical issues.
International progress in implementation
No country has implemented Pillar One as yet. Much progress has been made internationally, meanwhile, with implementation of Pillar Two, albeit to different extents from country to country. Many countries, including the EU Member States, the UK, Japan, Canada, Australia and South Korea, have already rolled out central elements, but key questions remain unanswered with regard to international coordination.
At the start of 2026, the OECD/G20 Inclusive Framework on Base Erosion and Profit Sharing adopted what it calls the Side-by-Side package. Among other things, this sets out safe harbour rules for certain alternative minimum tax systems. The US is the only country to have qualified for these so far. Other economically important countries, such as China and the BRIC states, are working to qualify for the safe harbour rules. The package also includes qualified tax incentives within the scope of the OECD minimum tax. The SBA welcomes this option for enhancing a country’s appeal from a tax perspective and will keep a close eye on further developments in this respect.
For Switzerland, the national top-up tax (qualified domestic minimum top-up tax or QDMTT) remains central. It is vital to Switzerland’s competitiveness and that of its financial centre for international implementation to be as coherent as possible in order to ensure a level playing field.
The stocktake planned for 2029 is very important. It is intended as an evidence-based review to pinpoint distortions of competition, risks to the level playing field and unwanted behavioural incentives.