Zug uses OECD minimum tax for location promotion
The canton of Zug, an internationally recognised business location, is facing up to the challenges of the global minimum tax introduced by the OECD. Through targeted investments in social projects and sustainable innovations, the canton plans to offset potential disadvantages and ensure its long-term attractiveness.
In response to the imminent introduction of a global minimum tax for large international companies from 2024, which could potentially affect the canton’s competitiveness, the canton of Zug has developed plans to compensate for any locational disadvantages. The planned measures include the complete reinvestment of the expected additional revenue of around CHF 200 million per year in three priority areas: social infrastructure, innovative projects and sustainable development initiatives.
Focus on social and innovative projects
The planned social measures are aimed at making life more attractive for the population and the local economy. These include investments in needs-based childcare provision, higher contributions to public schools and measures to improve the living and working environment. In the area of infrastructure and innovation, the focus is on future-oriented projects. Initiatives such as the “Blockchain Zug Joint Research Initiative” and the “ETH Learning Factory Zug” are intended to increase competitiveness and quality of life in the canton by promoting sustainable energy supply and storage.
Legal framework and financial planning
In order to achieve these goals, the cantonal government is proposing a new “Location Development Act” that will introduce an efficient and flexible system of subsidies for sustainability and innovation. From 2026, CHF 150 million per year is earmarked for subsidies, with the maximum subsidy amount being approved annually by the Cantonal Council from 2029. This approach is intended to provide companies in the canton of Zug with planning and legal certainty.
Finance Director Heinz Tännler emphasises that the planned measures are essential in order to maintain Zug as a preferred residential and business location. The public consultation on the new law will run until 15 September 2024 and the law is due to come into force on 1 January 2026. These strategic decisions demonstrate Zug’s commitment to maintaining its leading position despite global tax changes and remaining an attractive location for companies and skilled labour.