Switzerland Fact-File Part 2: Switzerland Individual Business Domestic Taxation

2.7 Switzerland Limited Companies Income Taxation

The Tax Treatment of Limited Companies

Resident incorporated companies are liable to pay corporate tax, which is levied at federal, cantonal and municipal levels. The federal corporate income tax rate is a flat 8.5% on net income. However, income and capital taxes are usually deductible in determining taxable income.

Cantonal tax rates, like the federal tax rates, are progressive, using a scale based on the relationship of profits to net worth. Most cantonal corporate tax rates in 2009 ranged between 12% and 20%.

Municipal tax on corporate income is calculated as a small proportion of cantonal tax. The combined effect of all of the types of levy produces an average overall tax rate of between 13% and 22% for companies – this varies depending on the location. Resident companies are liable to pay tax on worldwide revenue.

Withholding taxes on dividends and interest are generally 35%; there is no withholding tax on royalties.

New foreign companies can sometimes get an exemption from tax for up to 10 years and may also qualify for a tax exemption if investment is made in an area defined as one with economic difficulties.

Additionally, there may be tax advantages available for holding companies and mixed trading companies, depending on the canton; further information on this can be found here.

Introductory Guides

Switzerland Artist Tax Guide

Switzerland Contractor Tax Guide

Switzerland Entrepreneur Tax Guide

Switzerland Professional Tax Guide

Switzerland Small Business Tax Guide

Switzerland Sportsperson / Entertainer Tax Guide

Fact-File

Part 1: Switzerland Business Formation for Individuals

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