Switzerland Fact-File Part 2:
Individual Business Domestic Taxation

2.6 Switzerland Partnership Income Taxation

The Tax Treatment of General and Limited Partnerships

Partnerships in Switzerland may be treated as an entity or as a business run by individual partners and may be general or limited partnerships. The essential difference is in apportioning income and tax liability. In the so-called ‘entity model’, the partnership is treated as a separate legal entity (Limited Partnership), whereas in the second option (known as the flow-through model) income, and therefore tax liability, is attributed to the partners (General Partnership). A partnership can also be a foreign partnership as this is permitted under Swiss law.

With a general partnership, income is attributed to each partner and is apportioned according to the investment in the partnership. Each partner is responsible for filing his or her own personal tax return and tax is paid at personal income tax rates. Partners are classed as self-employed and may deduct any losses, or proportion of partnership losses, before establishing their own taxable base.

In a limited partnership, the partnership is itself a separate legal entity and tax is paid at corporate income tax rates – partners are jointly and severally liable for tax and other debts of the partnership.

A partner may either be an individual or a company (corporation) and will be liable to pay tax at the appropriate rate (income tax or corporate tax).

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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