Basel-Stadt cuts taxes

Citizens have approved the Basel compromise on corporation tax by a clear majority. The effective corporate income tax rate at the federal and cantonal levels including municipalities will drop to 13 percent, and capital tax rate to 0.1 percent. Income tax will fall as well, whereas deductions for health insurance payments will be raised.

Image credit: pxhere

The taxes in the canton Basel-Stadt will drop on a broad front. On Sunday, 78.8 percent of voters approved the Basel compromise for corporation tax. According to this, the profit tax rate will be reduced to 13 percent and the capital tax rate to 0.1 percent. At the same time, income tax will be cut and deductions for self-paid health insurance premiums will be increased. The canton is expecting relief totaling 100 million francs for companies and shareholders and of 150 million francs for the population.

At the same time, Tax Proposal 17 (“TP17”) will do away with the existing tax privileges for holdings, management and mixed companies. With the new patent box, the Canton wants to remain competitive as a research and development center.

The compromise had been worked out by the cantonal government in conjunction with all the parties represented in the cantonal parliament. As Martin Dätwyler, Director of the Basel Chamber of Commerce, is quoted as saying in a press release by his organization: “By accepting TP17 we have achieved legal security for companies and therefore created planning and investment certainty”.

"As the first German-speaking canton and pillar of the Life Science industry, Basel-Stadt is creating the basis for competitive, OECD-compliant, and legally certain taxation for companies domiciled in the canton", writes KPMG.

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