Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/148977 
Year of Publication: 
2016
Series/Report no.: 
KOF Working Papers No. 416
Publisher: 
ETH Zurich, KOF Swiss Economic Institute, Zurich
Abstract: 
In response to mounting international pressure to reform the ring-fenced elements of its tax system, the Swiss government has put forward a comprehensive tax reform package. The proposal comprises the introduction of a license box, a substantial reduction in cantonal pro t tax rates, and an allowance for excess corporate equity. We apply a computable general equilibrium model to quantify the economic effects of this reform. Our results reveal that the license box, combined with the reduction in the cantonal pro t taxes, limits the out ow of the tax base of those companies that bene t from the current preferential tax treatment. The reduction in cantonal profit taxes and the fact that regularly taxed companies additionally benefit from the license box render the reform package costly, such that tax revenues might well decline after the reform.
Subjects: 
Tax Competition
License Box
Mobile Firm Profits
Corporate Tax Reform
Dynamic General Equilibrium Model
JEL: 
H25
H32
C68
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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