Switzerland Fact-File Part 2:
Individual Business Domestic Taxation

2.12 Switzerland Individual Business Other Taxes

Other Taxes

Wealth Tax is imposed as a local tax rather than a federal tax. Residents pay annual wealth tax on the value of all assets located in Switzerland. Non-residents pay an annual wealth tax on assets derived from enterprises and real estate situated in Switzerland. The rate of wealth tax varies from canton to canton but cannot exceed 1%.

Inheritance and Gift Tax is imposed only at cantonal level, at rates which vary vastly according to the relationship between the donor and the beneficiary. The majority of cantons have abolished this tax with regard to inheritances passing to direct heirs and their immediate families. Some communes are empowered to collect inheritance and gift taxes but in reality, they obtain a share of the taxes collected by the canton. The canton of Schwyz does not levy inheritance or gift taxes and the canton of Lucerne does not impose a gift tax.

Stamp Duty liability arises with regard to certain transactions. These include issuing and trading in securities and the acquisition and movement of capital (including incorporating a new company). Stamp duty of 1% is payable on the value of issued shares, and 0.12% on bonds.

Any shares issued for reasons of increasing capital in a business are exempt from stamp duty on the first CHF250,000.

Transfers of securities by securities dealers are subject to a 0.15% stamp duty on Swiss titles, and 0.3% on foreign titles.

Stamp duty is payable on insurance premiums at between 2.5% and 5%.

Other taxes and duties include vehicle tax, beer tax, tobacco tax, spirits tax and taxes on mineral oils.

A gains tax is payable at a federal level on lottery winnings, life annuity and pensions and proceeds from insurance policies. Tax on lottery winnings is a draconian 35%, levied as a withholding tax!

There are also cantonal and communal taxes on real estate, again with significant cantonal variations.

Alternative Minimum Tax

There is no Alternative Minimum Tax for individuals in business as such, although the Lump Sum (or Fiscal Deal) assessment basis offers an alternative for resident aliens not seeking to work or perform other economic activity in Switzerland.

Special Income Tax Regimes for Individuals in Business

With the exception of the Lump Sum (or Fiscal Deal) assessment basis, which offers an alternative for resident aliens not seeking to work or perform other economic activity in Switzerland, there are no special income tax regimes for individuals, although tax-privileged operations may take place within the following business forms, all of which are variants of the basic Stock Corporation (which may put this type of corporate vehicle out of the reach of smaller businesses):