According to Reuters, in a public vote held on February 12, 2017, over 59% of Swiss voters rejected the Corporate Tax Reform III (CTR III). After parliament approved the measures in 2016, critics gathered the 50,000 signatures needed to trigger the February 12 referendum, which overturned the parliamentary vote.
On October 5, 2016, the Swiss Federal Department of Finance (FDF) published a table summarizing the CTR III measures, which included a notional interest deduction (NID) regime and a patent box incentive based on the OECD modified nexus approach.
Notional Interest Deduction (See BEPS Action 4)
The original CTR III issued on September 22, 2014 proposed to introduce a NID regime, but the version submitted by the Swiss Federal Council to Parliament on June 5, 2015 for consideration and approval removed these measures. Nevertheless, the NID measures were reinserted in the version of CTR III that the Swiss National Council approved on March 16-17, 2016. The NID regime proposed to allow Swiss companies to deduct "fictitious" interest from their taxable income, calculated as a percentage of the company's net equity.
Patent Box Regime (See BEPS Action 5)
The June 5, 2015 version of CTR III included a proposed "license box" regime for cantonal (but not federal) tax purposes, granting preferential treatment for revenue from patents and similar rights associated with research and development ("R&D") that would align with the OECD BEPS Action 5 "modified nexus" approach.
According to the final Action 5 report, the nexus approach allows a taxpayer to benefit from an IP regime only to the extent that the taxpayer itself incurred qualifying R&D expenditures that gave rise to the IP income. “The nexus approach uses expenditure as a proxy for activity and builds on the principle that, because IP regimes are designed to encourage R&D activities and to foster growth and employment, a substantial activity requirement should ensure that taxpayers benefiting from these regimes did in fact engage in such activities and did incur actual expenditures on such activities.”