This Swiss canton is about to become the world’s top tax haven

The tiny Swiss canton of Nidwalden has unveiled a suite of reforms which will see it overtake Hong Kong in having the most favourable taxation rates for corporations.

This Swiss canton is about to become the world’s top tax haven
Nidwalden is better known for chairlifts rather than low taxes. Photo: FABRICE COFFRINI / AFP

With a population of 43,223, the central Swiss canton of Nidwalden is one of the countries tiniest. 

But a new set of reforms are set to put it on the map – at least for corporate clients. 

The adoption of a set of tax reforms – partially motivated by the coronavirus crisis – will result in Nidwalden adopting a corporate tax rate of 9.8 percent. 

Currently, Hong Kong has the lowest corporate tax rate in the world but will be undercut by Nidwalden if the changes take effect. 

READ: Switzerland's strangest taxes – and what happens if you don't pay them 

As reported in the NZZ however, other countries may follow suit – meaning there’s no guarantee that Nidwalden will stay number one for long. 

A number of other Swiss cantons have also announced reductions in order to attract corporate clients. 

In addition to Nidwalden, Uri and Schaffhausen have also slashed their tax rates, while Bern now comparatively has one of the higher rates in Switzerland. 

The changes are not immediate however and are expected to take effect in 2025. 

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Switzerland and Italy hope to deliver cross-border worker tax deal ‘by 2021’

Switzerland and Italy have pledged to conclude a long-awaited tax arrangement for cross-border workers by the end of the year.

Switzerland and Italy hope to deliver cross-border worker tax deal ‘by 2021’

At a meeting in Rome between Swiss President Simonetta Sommaruga and Italian Prime Minister Giuseppe Conte, the two leaders said progress was being made on a cross-border tax arrangement. 

The agreement, originally negotiated in 2015, has as yet not been signed by either state. 

READ: How Switzerland avoided a coronavirus 'catastrophe' by protecting cross-border workers 

A 1974 agreement between the two countries doesn’t define cross-border worker. 

Sommaruga praised Switzerland’s decision to reject an initiative which would have restricted migration from EU countries and perhaps had impacts on cross-border workers. 

“In last Sunday's referendum, the Swiss people once again said that they want the free movement of people. It is a good thing for our country but it is also a good thing for the whole of Europe,” she said. 

“With neighbouring countries, Switzerland has adopted a regional approach excluding border regions and also cross-border workers from the quarantine regime. 

“I hope we can continue like this.”

While Switzerland rejected the migration limitation initiative, Ticino was one of four of Switzerland’s 26 cantons to vote in favour. 

Conte told reporters he hoped a deal was concluded “as soon as possible” and hoped it would be concluded by 2021. 

Conte hailed Italian cross-border workers as essential to the health system in the southern Swiss canton of Ticino, particularly during the coronavirus pandemic. 

READ: How Switzerland's cross-border workers are growing in number 

In the canton of Ticino, one in five healthcare workers lives over the border in Italy – approximately 4,000 people. Ticino’s population swells from approximately 360,000 people to 440,000 during an average work day due to cross-border workers from Italy.

Unlike with Italy, Switzerland has struck a tax deal for cross-border workers from neighbouring France, which was amended during the coronavirus pandemic.