Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

May 23, 2023

Geneva Parliament votes to abolish the Geneva Municipal Business Tax

  • A recent vote would abolish the Geneva Municipal Business Tax, absent a public referendum, effective as of 2024.
  • This change would likely be beneficial for multinational entities that must comply with BEPS 2.0.
  • Affected entities should prepare for the change, as a public referendum is unlikely.

Executive summary

On 11 May 2023, the Geneva Parliament voted to abolish the Geneva Municipal Business Tax (MBT; in French: taxe professionnelle communale) with a broad political consensus.

If no public vote (referendum) takes place, the abolishment should be effective on 1 January 2024. In other words, no MBT would be due for fiscal years 2024 and following.

This change would abolish an old and complex tax, simplify compliance obligations and reduce related costs. The change offers an efficient solution for companies within the scope of BEPS 2.0 Pillar Two, potentially reducing overall tax expense.

Detailed discussion

The MBT has been levied since 18th Century by the municipalities of the canton of Geneva. Imposition of the MBT is based on:

  • Revenue and other gross income (with exceptions for certain industries and companies)
  • Annual rent paid for, or tax value of, premises the company rents/owns
  • Number of employees

The tax rate varies depending on the company's activities deployed in the canton.

Numerous multinational enterprises (MNEs) that benefitted before 2020 from the so-called preferential mixed company tax regime encounter complicated and burdensome rules. They are currently subject to MBT on their Swiss-sourced turnover on the one hand, and on their foreign-sourced qualifying expenses on the other hand. For certain foreign-sourced activities, the MBT burden recently increased significantly.

Upon the abolishment's entry into force, municipalities' loss of MBT revenues would be compensated through a corresponding increase overall of the corporate income tax (CIT) rate. The combined (federal, cantonal and communal) CIT rate would increase on average from the current 14% to 14.7%. This increase would be shared between communes based on certain formulas.

These changes should be more efficient for the companies in scope of Pillar Two of BEPS 2.0. The increased CIT could still be below the 15% global minimum tax rate and, with the MBT abolished, the overall tax expense for affected MNEs could decrease, particularly as duplication of expenses such as a top-up tax plus MBT would be eliminated.


Concerned MNEs and small and medium-sized enterprises will want to consider:

  • Following developments regarding whether or not an (unlikely) referendum vote on the MBT abolishment will be held
  • Modelling the impact of the MBT abolishment and considering, where relevant for MNEs, the potential positive impact of the change for BEPS 2.0 Pillar Two purposes


For additional information with respect to this Alert, please contact the following:

Ernst & Young Ltd, Geneva

  • Eric Duvoisin |
  • Hugo Lombardini |
  • Karen Simonin |
  • Anastasia Mushailova |

Ernst & Young LLP (United States), Swiss Tax Desk, New York

  • Stefan Ruest |

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor


The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


Copyright © 2024, Ernst & Young LLP.


All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.


Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.


"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.


Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or Please refer to the privacy notice/policy on these sites for more information.

Yes, I accept         Find out more