Swiss tax break for MNCs set to go in Feb 12 referendum

Zurich

US medical implant maker Zimmer Biomet's decision on a potential US$40 million investment in its Swiss factory has been put on hold until the outcome of a referendum next month on tax reform.

A long-standing tax break that has attracted thousands of companies to Switzerland is set to go and the issue for Zimmer and some 24,000 international firms is how the new regime will stack up against other low-tax jurisdictions.

That's not immediately clear as Switzerland's 26 regions, or cantons, set their business taxes. Consultants KPMG reckon the average Swiss corporate rate will be about 14 per cent after the reform, above Ireland's 12.5 per cent, but lower in some cantons.

Switzerland has been in the European Union's (EU) firing line for years because cantons have a special tax status for foreign companies, which means some pay virtually no tax over an effective federal …