[World Tax News] Swiss Voters Approve the Implementation of Pillar 2 Global Minimum Tax and More

Editorial Team – [2023] 151 taxmann.com 400 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week.

1. Swiss voters approve the implementation of Pillar 2 Global Minimum Tax

On June 18 2023, the Swiss electorate voted in favour of an amendment to the Swiss Federal Constitution. By amending the constitution, the Federal Council and Parliament will promptly implement the OECD/G20 minimum taxation of 15% for large multinational enterprises in Switzerland.

The initial phase will involve the issuance of an ordinance that establishes a temporary “supplementary tax” to ensure a minimum level of taxation for corporate groups with consolidated global revenue surpassing EUR 750 million.

Due to the OECD’s ambitious timeline, the constitutional amendment contains a transitional provision that gives authority to the Swiss Federal Council to introduce the Pillar Two rules through an ordinance.

Effective January 1, 2024, the temporary ordinance will be in effect and eventually substituted by Federal Law regarding the global minimum tax.

Source: Voting Results by Swiss Voters

Release by Swiss Federal Council

2. Ukraine to Terminate Tax Treaty with Syria

Ukraine has approved the draft law on the termination of the Agreement between the Government of Ukraine and the Government of the Syrian Arab Republic on the avoidance of double taxation and the prevention of tax evasion.

The enactment of the Law will lead to the cessation of the application of the provisions outlined in the Agreement mentioned above, yielding the following benefits:

(a) After the Agreement termination, all income earned by Syrian residents from Ukrainian sources will be subject to a uniform tax rate of 15%, as stipulated by the Tax Code, instead of the preferential rates set by the Agreement: 10% for dividends and 10% for interest.

(b) The Law will prevent Ukraine from incurring losses to its budget by no longer crediting taxes paid in Syria by Ukrainian residents engaged in activities there.

(c) Additionally, Ukraine will be relieved of its obligations concerning the exchange of tax-related information with the competent authorities of Syria.

For the termination to take effect, the draft law needs to receive approval in parliament and be published in the Official Gazette. According to the treaty’s conditions, if the notice of termination is given by the end of June 2023, the termination would be applicable from January 1 2024, at the earliest.
Source: Releasedated 16-06-2023

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