Definition and Fundamentals
Corporate taxes are levies that companies in Switzerland pay to tax authorities. Depending on the company’s situation and legal form, taxation may apply to income, profit, turnover, or capital. Corporate taxes contribute to funding public services, infrastructure, and governmental functions.
In Switzerland, corporate taxes are imposed at multiple levels: federal, cantonal, and municipal.
Importance of Corporate Taxes
Corporate taxes serve both as a major source of public revenue and as an economic policy instrument. Tax rates, exemptions, and incentives can influence investment, employment, and growth. Due to significant cantonal differences, a company’s location within Switzerland can materially affect its overall tax burden.
Types of Corporate Taxes in Switzerland
Profit Tax
Profit tax is levied on a company’s net profit. Tax rates and assessment bases vary by canton and municipality. In certain cantons, reduced rates may apply to specific companies or situations, making location choice a relevant planning factor.
Capital Tax
Capital tax is levied on a company’s equity and can influence capital structure and financing decisions. Rates differ across cantons and municipalities. Capital companies such as public limited companies and limited liability companies are generally subject to capital tax, with effective burden varying by location.
Value-Added Tax (VAT)
VAT is an indirect tax on the sale of goods and services. The standard rate is 7.7%, with reduced rates applicable to certain goods and services. Companies must ensure correct calculation, reporting, and administration of VAT, particularly in cases involving multiple rates or complex transactions.
Calculation and Optimisation of Corporate Taxes
Calculating corporate taxes requires determining the taxable base. For profit tax, this typically involves calculating taxable profit based on operating income minus operating expenses, depreciation, and other deductible items. Applicable tax rates are then applied according to tax type and location.
Tax optimisation within legal limits is achieved through structured tax planning and appropriate strategies. These include selecting the legal form, choosing the business location, structuring financing, and using available tax benefits, deductions, or agreements.
Investments in research and development, environmental measures, or employee training may lead to tax relief if requirements are met and costs are properly documented.
The legal form of a business significantly affects taxation. Sole proprietorships and partnerships are often taxed at the owner or partner level, while capital companies such as public limited companies and limited liability companies are generally subject to profit and capital taxes at company level, with dividends taxed at shareholder level.
Digitalisation is reshaping business models and introducing new tax considerations, for example in e-commerce or the use of blockchain and cryptocurrencies. In addition, potential tax reforms and sustainable tax models may further change the tax environment. Ongoing review of the tax position helps companies stay prepared for change.
