Corporate taxes in Switzerland
The Swiss Confederation, the cantons and the municipalities are in charge with the establishment and collection of Swiss taxes
. Since Switzerland is considered to be a tax heaven and the rates are generally low, investors tent to choose Switzerland for developing a business
. If we add the political stability and the prosperous economy, Switzerland is also a great choice for foreign persons considering changing their residency, as low taxes appliy to them as well.
Best cantons in Switzerland for investments
Switzerland is formed out of 26 cantons, known as member states of the federal state of Switzerland, and each canton has its own regulations and courts, but most of the cantons’ legislation is made through unicameral parliaments. The most recent canton is the Canton of Jura, and it separated from the Canton of Bern in 1979. The cantons of Switzerland
are responsible for healthcare welfare and they retain the power of taxation. When it comes to Swiss corporate taxes
, the rates applied are different from one canton to another. Cantons have in general an average tax rate of 14.4 percent when it comes to income, capital and property tax.
Canton of Zurich is ranked 22
2014 has not brought Zurich many changes in terms of taxation even if the canton is ranked 22 regarding possible places to invest in Switzerland
. The new cantonal leaders are Nidwalden and new Lucerne. However Zurich provides investors with many opportunities
and is considered better in comparison to other big business locations such as Basel and Geneva. Also, comparing Zurich canton with other investments places on the globe, the position of Zurich is a good one.
All visitors requiring more information on the taxes applied in Switzerland
are welcome to contact our company formation specialists
and you will receive all the information you need as well as legal advice.
Corporate tax system in Switzerland
The corporate tax system of Switzerland
is a classical one, meaning that a corporation as well as its owners or shareholders are taxed individually, leading to a double taxation. The taxes applied to legal persons are on their profit and capital, except for charitable organizations. Liable for taxes are legal seats of effective management of a company in Switzerland
, as well as non-resident companies that have Swiss sources of income.
The Corporate Tax Rate is 17.92 percent in Switzerland, but it varied between 19.01 to 21.23 percent between 2006 and 2014. It is a tax collected from companies and the amount is based on the net income obtained by the companies while performing their usual activity within one business year.
Switzerland has a low federal corporate tax rate
The federal corporate tax rate is Switzerland is only 8.5 percent. However, if the cantonal and municipal taxes are included, the rate can reach up to 21.2 percent, in comparison to a 30 percent rate in Germany and a 25.5 percent in Netherlands.
The main drivers in multinationals are the cantons and two thirds of the total taxes are levied by them and they also have a wide autonomy on social security contributions, business permits, residency requirements and construction rules. Therefore, cantons are responsible for the foreign investments in Switzerland.
Tax heaven, supported by the provisions on double taxation
A large contribution to the so called tax heaven in Switzerland
is represented by the provisions that limit the double taxation of profits at the corporate level
. For example, companies that hold 20 percent or more in shares of other companies receive a participation exemption, and therefore the reduction of the tax applied to the corresponding profit is made based on the percentage of the owned shares. In addition, the cantonal laws
offers a domicile privilege to companies administered in Switzerland
that run the business abroad. Such companies are subject to a tax of only 10 percent of the worldwide profits.