Introducing an IP license box in Switzerland: quantifying the effects

Florian Chatagny, Marko Koethenbuerger, Michael Stimmelmayr

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1 Citation (SciVal)


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 profit 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 profit taxes, limits the outflow of the tax base of those companies that benefit 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.
Original languageEnglish
Pages (from-to)927-961
Number of pages35
JournalInternational Tax and Public Finance
Issue number6
Early online date14 Feb 2017
Publication statusPublished - 1 Dec 2017


  • Tax competition License box Mobile firm profits Corporate tax reform Dynamic general equilibrium model


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