Its proponents call it the “tax revolution”: the introduction of a global minimum tax rate for multinational corporations. But rivals are not starting a revolution. They seem to agree with the decision of the Group of Seven Western Industrial Countries (G7). Instead of retaliating, they prefer to prepare for the new tax world.

The lack of a setback can be seen in the example of Pirmin Undermarket. He is the CFO of the bar, the most tax-efficient municipality in Sug, and the most tax-efficient canton in Switzerland. In fact, the bar must lose a decisive advantage if it is forced to pay higher taxes. But Andermat says:

“Because of the low tax rate alone, no company is likely to change.”

This serenity is not revealed to outsiders at a glance. The corporate tax rate at the bar is currently 11.8 percent, with Lucerne Municipality in Megan having the lowest rate. The bar is widely known as the headquarters of large companies: raw material giant Glencore, asset manager partners’ group, and SMI company Sika, based in Sug Municipality. They will be affected by the global minimum tax of 15 percent.

Skewers of the same length for everyone

He can explain Andermat’s calm by expecting competition between locations to be restored. “In terms of tax rates, in the future all business locations will have the same length of skewers.” Then something else will work, where the bar is well positioned: centrally located in Switzerland, in the center of Europe, near the financial metropolis of Zurich. The potential for skilled workers is very high, the infrastructure is excellent and the standard of living is high. In addition, there are well-known Swiss powers, such as stability, law enforcement, and local authorities, which are rolling out the red carpet for companies. Andermat says: “These Trump cards will stand out in the future.” People at the bar believe they can cope with the new tax world that is starting.

That resistance is futile. The Federal Council also wants to move forward in line with this slogan. Federal Bern wants Switzerland to adapt to the new world as soon as possible. Because, in his opinion, this new world will begin soon. By the middle of this year the National Association of OECDs will meet certain criteria. Details will be ready by the end of 2021. The Federal Council is in the process of preparing a reform plan accordingly. He doesn’t seem to want to run special trains – everything has to be “internationally recognized”.

Switzerland is not alone in this attitude. As expert Sach Meyers noted, other low-tax countries are behaving similarly. Experts on tax policy from the Center for European Reform say: “It is remarkable how countries have remained silent, and resistance can be expected from it.” One possible explanation for this is how the minimum tax is implemented.

Cooperation between tax sites is not even required

Each country regulates that its own multinational companies admit 15 percent of their profits. For example, the US will look into whether Apple is complying with the lowest tax rate in Ireland. If the global corporation pays only 5 percent, the US will collect the remaining 10 percent. From the point of view of high tax countries, this has the advantage: there is no need for cooperation between tax sites. How will the US see Apple paying taxes in Ireland? This is because it requires the US tax authorities to submit the required information. This was decided by the OECD Country Association. L’Oreal is required to provide similar data from France to Fiat to Italy.

This approach weakens the influence of low tax countries. As economist Myers puts it, the minimum tax can actually operate without their consent: “If large countries accept the minimum tax, large corporations cannot avoid paying the minimum tax.”

The new competition for big corporations has already started at the bar. Chief Financial Officer Andermat says: “We are investing in our infrastructure, building school buildings, upgrading the center and train station.” With or without low taxes – the bar will remain attractive.