Neuchatel approves new tax plans for international business

Voters in Neuchatel have approved a change in the tax system proposed by the cantonal authorities to make the area attractive to new businesses

The cantonal finance minister, Jean Studer, had previously described the reform as an essential “new social contract” with business.

It is designed to end the canton’s extensive use of tax breaks, which has left only half of Neuchatel-based firms paying corporate tax. Instead, a lower standard rate, one of the most attractive in Switzerland, will be applied to all companies.

Between 2011 and 2016 it will fall from ten to five per cent. The tax department believes the new deal will increase its tax revenues.

Opponents say Neuchatel is entering a tax race, and other cantons will cut their rates to follow suit.