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An analysis by TaxPartner AG, Taxand Switzerland
Switzerland’s Federal Council has recently announced the introduction of the Income Inclusion Rule (IIR) beginning from 2025. The IIR imposes a 15% minimum tax on profits of foreign subsidiaries of Swiss entities in multinational groups with consolidated revenues of at least EUR 750 million. This ensures Switzerland captures tax revenue that would otherwise be taxed abroad under the OECD’s Undertaxed Payment Rule (UTPR).
Switzerland will not introduce the UTPR for now, prioritising legal certainty and competitiveness over modest potential revenue gains. The IIR marks a shift in Swiss tax policy, which previously avoided taxing foreign subsidiaries.
Monika Bieri and Patrick Bieri from our Swiss member firm TaxPartner AG have analysed this move in further detail here.
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