Switzerland is formed of 26 cantons (Aargau, Appenzell Inner Rhodes, Appenzell Ausserrhoden, Berne, Basel-Country, Basel-Stadt, Fribourg, Geneva, Glarus, Grisons, Jura Mountains, Lucerne, Neuchâtel, Nidwalden, Obwalden, St. Gallen, Schaffhausen, Solothurn, Schwyz, Thurgau, Ticino, Uri, Vaud, Valais, Zug, Zurich), which are able, under the applicable legislation in Switzerland, to organize their own taxation system.
is thus entitled to collect any tax
that is not exclusively in the competence of the Swiss Confederation
. That is why the cantonal tax
laws and tax rates
vary considerably from one canton
to another and our team of company formation specialists in Switzerland
can offer tax advice on each taxation framework
available for corporate entities or for natural persons.
Below, we present the cantons with the lowest corporate tax rates:
The canton of Lucerne
applies the smallest corporate tax
, imposed at the rate of 12,32%
. Businessmen who want to open a company in Lucerne
should know that the economy of the region is based on the following sectors:
• public sector;
• metal industry.
Another canton with a small corporate tax rate (applicable at the rate of 12,66%) is Nidwalden.
The main economic fields in Nidwalden
aviation and mechanical engineering and investors who want to open a company in Switzerland
in these sectors will need to comply with the legislative framework available in this region.
The third smallest corporate tax
is applied in the Obwalden canton
, where the rate is imposed at 12,89%
on the company’s income
. The canton
provides a workforce
with a high degree of skills and the top economic fields are represented by the tourism and plastic indutries.
4. Appenzell Ausserrhoden
In Appenzell Ausserrhoden
the tax on the corporate income
is applicable at the rate of 13,04%
and it is important to know that the local workforce
is mainly employed in the canton’s main economic sector
– the services sector. 52,6% of the total workforce is employed in this industry.
5. Appenzell Inner Rhodes
In the canton of Appenzell Inner Rhodes
, the local authorities apply an income tax of 14,16%
and the top economic fields are represented by agriculture, industry and the service sector. Our team of consultants in company registration in Switzerland
can offer more details on how to start a business in one of these sectors.
, the corporate tax rate is of 14,6%
. It is important to mention that Zug
represents one of the most representative cantons in Switzerland
from an economic point of view. Companies operating in Zug
are specialized in activities related to the medical technology and electronic components. Another important economic field refers to the financial sector.
In Uri, the corporate tax rate is of 15,11%. The top fields are represented by the tourism industry, which employs more than 10% of the local workforce, as well as the construction sector. In this sense, we mention that numerous local and international companies have set their business operations in the latter field.
The eighth lowest corporate tax, applicable at the rate of 15,27%, is available in the canton of Schwyz. The canton develops its local economy in sectors that are characteristic to other cantons, such as agriculture or finance. Specific industries available here are the timber industry and the machine-tools field.
In Neuchâtel, the tax on income is applicable at the rate of 15,61%. The canton is very well known for the watch industry, micro-technology and high-tech field. The region attracted over the years numerous companies operating in these sectors.
With a corporate tax rate of 15,71%
, the canton of Glarus
attracted numerous local and foreign companies
, and a large part of them are involved in operations related to the manufacturing field.
Investors interested in company formation in Switzerland
in the field of manufacturing could choose Glarus
, as the manufacturing industry is the most developed in this region.
The classification mentioned above provides a useful insight on the smallest taxes applicable to the income of companies.
Cost of living in Swiss cantons
The cost of living is not the same everywhere in Switzerland, for example, housing in the canton of Geneva is very expensive, which is not necessarily the case in the canton of Fribourg or in another similar canton.
For many years, Swiss German cantons and even Central Switzerland have been cantons with the lowest taxes, offering cheaper taxes and Uri was one of the most advantageous region in this sense.
In Switzerland, taxes represent about 11.6% of the average gross household income, being considered a major expense. From this point of view, it can be noticed that in the central and eastern side of the country can be found the cantons with the lowest taxes in Switzerland.
Fiscal sovereignty in Switzerland
Fiscal sovereignty in Switzerland is now shared by the three levels of government: the Confederation, cantons and communes and the boundary is set by the federal constitution, which provides that the cantons may levy a tax that is not reserved for the Confederation.
Moreover, it is the cantonal constitutions that secure communal levies based on coefficients or multiple respective cantonal taxes.
As a general rule, all cantons in Switzerland impose the same types of taxes applicable to companies, as follows:
• excise duty;
• withholding tax;
• custom duties.
However, due to the sovereignty of the cantons, the local authorities can set up their own tax rates, with the consequence of regional disparities manifested by several differences in cantonal per capita income and tax burden, which can be doubled or more from one canton to another, drawing up a criteria for the cantons with the lowest taxes in Switzerland.
Tax competition between Swiss cantons
The mobility of capital and labor also increases tax competition
and some cantons
(Zug, Schwyz and Nidwalden
) have removed their estate taxes and established more attractive prices to attract investors
This led to the establishment of a system of financial equalization, in order to mitigate the differences in financial capacity of cantonal and local authorities, through federal quotas (restitution of part of federal revenues) and grants.
Please contact us for further information about taxation in each Swiss canton. Our specialists are able to provide certain data for taxes that must be paid for both companies and individuals in any part of Switzerland. They can also recommend you partners in other countries, such as Bulgaria and Iran, who can offer you details about opening a business there.