Swiss tax clockwork
"Having started my new role as head of Corporate Client Coverage Europe five weeks ago, I have already had the pleasure of visiting four countries, meeting the teams on the ground, as well as clients. Covering Europe, the frequency of travel has increased, but at least the jet lag has diminished considerably!"
A blog by Jeroen Plag, head of Client Coverage Europe at ING, on a business trip in Switzerland
During my last 24 hour trip to Switzerland, I came to appreciate the timely Swiss transportation system again. It reminded me of a previous trip when the conductor apologised for being four minutes late - uniquely Swiss!
I landed in Geneva, where there was not a lot of snow in contrast to Amsterdam after that weekend’s weather! Travelling via Geneva, Lausanne to Basel, I spent the full day with the team, after which I joined colleagues to meet with Swiss clients. One of the topics discussed was the Swiss tax referendum, which was voted down over the weekend, while tax announcements on the other side of the pond in America are keeping treasurers busy, determining the right tax and funding strategy.
Not being known for high tax rates, the Swiss voted against the proposed CTR III tax reforms. This vote was not connected to the already announced tax changes, as many cantons will lower their corporate tax rates - as planned, reductions are likely to enter into effect as of 2019. The current preferential tax regimes, amongst others, will stay in place, much to the disappointment of the European Commission, which is looking to level the playing field across Europe. Swiss finance minister Ueli Maurer warned that the country “will no longer fulfil its promise to international partners and it would abolish corporate tax privileges by 2019”.
Next to the pipeline of ongoing projects and transactions and (US and Swiss) tax discussions, we discussed the main areas of focus for this year and where we can be of assistance. Clearly an ongoing area of focus remains working capital management and the Swiss team is already inviting clients to an event on 21 June in Zurich. During this event, corporate clients will be briefed on an innovative ING game/application, allowing them to optimise their financial supply chain. Participating in the game, using their own and benchmark data, they get an opportunity to scan their company against the best practices in the market. The game element allows for the various stakeholders in sales, finance, treasury and procurement to explore interdependencies - with only one winner at the end of the simulation, having maximised the value of their financial value chain!
While the negative vote on the tax reforms was expected to a certain extent, greater focus is on the less certain outcome of regulatory and tax changes, including in the US. If only the outcome was as reliable as the Swiss railway system!
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