On 10 February 2019, the popular vote in the canton of Basel-City has resulted in an important success for the Basel-City political parties, the Basel-City administration and the economic region. The “compromise for the implementation of Tax Proposal 17”, has been accepted by a large majority. Authors: Andrea Bätscher and Dominik Bürgy.
The compromise which was supported by all political parties, except the left wing fraction “Basta”, and tirelessly promoted by the cantonal minister of finance Eva Herzog, clearly demonstrates the importance of the topic for the future success of the economically strong region of Basel. Even though the result of the federal vote is still outstanding (19 May 2019) the canton of Basel-City has taken the opportunity to grant as much security and stability to its taxpayers as possible. Some of the advantageous changes will be implemented retroactively as per 1 January 2019.
What’s about to change?
We sprepared a high level overview of the basic points of the well balanced proposal for you:
- Abolishment of existing tax regimes
- Patent box with a maximum relief of 90%
- Overall tax relief of 40%
- Capital tax relief
- Disclosure of hidden reserves by applying a special tax rate
- Reduction of effective corporate income tax rate to some 13%
- Amendments in partial taxation of dividends and repayment of capital contribution reserves
- Income tax relief for individual tax payers
- Increase of family allowances
Whether the positive outcome of the public vote in the canton of Basel-City is representative and an indication for the public vote on the federal level (Tax Reform and AHV Financing “TRAF”) is to be seen. However, it clearly indicates the political will of a region to strengthen its attractiveness for nationally and internationally acting companies.
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