Last Sunday, the Canton of Zurich voted for Tax Proposal 2017 (TP17) and gave the green light to implement the Tax Reform and OASI Financing (TROF) measures at cantonal level as planned. The new tax legislation had already been accepted federally in the national poll of May 19,2019.
The cantonal tax adjustments will enter into force on January 1, 2020 (followed by a corporate tax cut effective from January 2021) and include the following:
- Abolition of tax privileges. TROF / TP 17 abolishes the privileged taxation status of holding, mixed, domiciliary, and principal companies as well
as Swiss finance branches. Companies in the Canton of Zurich that lose their privileged status are given the option to disclose their existing hidden reserves tax-neutrally (step-up) and depreciate them over 10 years, or agree to a special tax rate for a limited transition period to cushion the effects of the abolition. These compensation measures can also be combined in the Canton of Zurich.