Tax Deductions for Companies in Switzerland
Companies can use various deduction options to reduce their tax burden. These deductions may relate to operating costs, investments, and specific activities such as research and development.
Operating Expenses
Operating expenses include costs incurred in connection with business activities, such as rent, salaries, material costs, and administrative expenses. Advertising, training, travel expenses, and external services such as consulting or IT support can also be deductible. Proper documentation and retention of supporting documents are required.
Depreciation and Write-Offs
Depreciation can be applied to fixed assets such as machinery, vehicles, and buildings. This reduces taxable profit by allocating acquisition costs over the useful life of the assets. Swiss guidelines define applicable depreciation rates. Companies may use linear or declining balance depreciation depending on regulations and financial strategy.
Research and Development Deductions
Investments in research and development may be tax deductible in many cantons. Eligible costs can include personnel expenses, material costs, and external services related to R&D. Expenses for patents and licences connected to R&D projects may also be relevant. Detailed documentation of activities and costs is essential.
Investment Deductions
Investments in new equipment, machinery, or infrastructure may be deductible. This can support modernisation and capacity expansion. Investment deductions may apply to IT infrastructure, production facilities, or office equipment. Some cantons also offer additional support programmes.
Special Rules for SMEs
Small and medium-sized enterprises often benefit from specific tax relief measures at cantonal level. These may include reduced tax rates or additional deduction options such as enhanced investment deductions or simplified depreciation rules. Special support programmes may also be available.
Tax Incentives for Sustainable Investments
Investments in environmentally friendly technologies and sustainable projects may qualify for tax incentives. Examples include solar installations, insulation measures, and other eco-friendly technologies. In some cases, subsidies or reduced tax rates may apply.
Loss Offset
Business losses can generally be offset against future profits, reducing tax liability in profitable years. Losses can often be carried forward for several years. Accurate documentation of losses is required for correct application.
Tax-Free Provisions
Companies may create provisions for future obligations that reduce taxable profit. Examples include provisions for warranty claims, maintenance, litigation risks, or restructuring. Provisions must be justifiable and properly documented.
Interest Deductions
Interest paid on borrowed capital is generally deductible. This includes interest on business loans, leasing arrangements, and other financing instruments. Proper recording and documentation of interest expenses are necessary.
Special Situations: Start-Ups and International Companies
Start-ups may benefit from specific tax relief measures, such as reduced tax rates or additional deductions during the initial years. The aim is to support company formation and growth.
International companies operating in Switzerland are subject to specific rules regarding transfer pricing, foreign income, and double taxation agreements. These regulations help ensure appropriate taxation and can be relevant for tax planning.
