PCP
Abolition does not prescribe every replacement
The reform would abolish contested cantonal special regimes for holding, domiciliary and mixed companies. The official brochure distinguished these regimes from ordinary federal profit taxation. The issue was a particular cantonal tax structure, rather than complete exemption from every tax for all affected companies.
International compliance did not dictate one possible future tax burden. The package combined status abolition with reliefs and cantonal discretion. Separating those steps allows necessary rule changes to be recognised without treating every concession as their automatic consequence.
The ballot concerned the whole package. Rejection prevented that law becoming the announced framework. Its measures must therefore not be described as implemented in 2017, nor their forecast losses as revenue actually lost under the rejected law.
Tax bases and rates are different levers
The proposed patent box would tax certain patent and comparable-rights income more lightly. Research and development deductions could exceed actual expenditure. These instruments alter taxable profit; they are not simply a general cut in the published rate.
The package also included an interest deduction on part of equity capital. The brochure distinguished mandatory and optional measures across public authorities. A company without qualifying income does not necessarily receive the same advantage as another. Distribution therefore also concerns differences between activities and financial structures.
Cantons were separately considering lower ordinary profit rates. A serious comparison needs both columns: the base taxed and the rate applied. Looking only at one conceals part of the change.
Federal transfers do not create consolidated revenue
The cantonal share of direct federal tax would rise from 17% to 21.2%. This would strengthen cantonal resources relative to the Confederation’s. For the public sector as a whole, that shift does not itself create additional revenue: it changes the level receiving funds and the level bearing the corresponding loss.
The transfer was intended to help cantons meet reform costs and tax reductions. Municipalities also provide services and depend on cantonal distribution. Help for a canton does not mechanically guarantee equal compensation for every local budget. Revenue must be followed to its final recipient.
Geneva illustrates this without representing all Switzerland. Its government said on 12 February that it had planned to allocate part of the compensation to municipalities. That was an announced cantonal choice, rather than a uniform federal automatic payment.
Expected behaviour and immediate obligations
Supporters argued that competitive conditions would preserve company locations, jobs and receipts. The mobility of profits and activity deserves examination. A behavioural forecast is not a certain receipt booked in advance: it depends on companies, other countries and cantons.
The official brochure acknowledged that the overall impact could not be quantified beforehand. Uncertainty also applied without reform. It established neither guaranteed self-financing reliefs nor identical losses in every territory. Assumptions need to remain visible.
Schools, transport and social services do not automatically change their funding needs with declared profits. Local budgets still meet commitments during transition. Debate must specify who absorbs revenue arriving late or below forecast.
Municipal finances needed visibility from the presentation of the proposal. Citing only a cantonal total without explaining the services involved leaves the conflict abstract. Setting available revenue alongside lasting commitments would make alternatives concrete without asserting a predetermined cut. It makes the decision contestable before later budgets distribute its consequences. Residents could then judge which public capability is at stake and what compensation would actually reach their municipality, rather than assuming the announced cantonal total resolves the question for every local service.
Rejection opened a different political sequence
On voting day Geneva called for a new federal proposal. It said status companies’ tax conditions would remain unchanged until new federal and cantonal legislation. It had also never planned to use the notional-interest deduction. National provisions and cantonal intentions were distinct.
A transparent comparison first shows the direct rule effect with activity unchanged, then scenarios involving relocation or profit shifts. Neither view is sufficient alone. The transition must be explicit so the effects of public decisions can be distinguished from assumptions about behaviour.
The PCP’s conclusion in 2026 is democratic budget responsibility. Ending a privilege cannot automatically justify every further reduction. Options must be judged by tax base, beneficiaries and consequences for public authorities. Durable economic activity also needs funded infrastructure, skills and services; preserving their capacity belongs in the discussion of an attractive business location.