Last modified: 10/01/2025 07:54

Corporate taxation

	Rate
Federal corporate income tax rate (1)	8.5%/7.8% (effective) (2)
Federal branch tax rate	8.5%/7.8% (effective)
Federal capital gains tax rate	0% (3) / 8.5%/7.8% (effective)

1. Local taxes (cantonal/communal) always apply in addition to federal tax (see below “significant local taxes”)
2. Taxes are a deductible expense in Switzerland
3. Capital gains from investments held for at least 1 year or with a fair market value of more than CHF 1 Mio. Are tax exempt

Residence: A company is resident in Switzerland if it has its legal seat (registered office) or its effective management and control there.

Basis: Resident companies are taxed on their worldwide income, except for profits derived from foreign branches and foreign immovable property, which are tax exempt. Non-resident companies are taxed on permanent establishment (PE)/branch income and/or on immovable property located in Switzerland. Branches are taxed in the same way as subsidiaries.

Taxable income: Corporate income tax is imposed on a company’s net profits per GAAP including business/trading and passive income and capital gains. Foreign source income is included in taxable income, but relief is granted for dividend income from qualifying participations. Business expenses are deductible. Gains and losses from the conversion of financial statements in a functional currency into CHF are disregarded for tax purposes.

Significant local taxes on income: The 26 cantons levy their local corporate income taxes which range between 11.5% and 22% and are deductible also. Considering both federal and cantonal/communal income taxes, the combined effective tax rates generally are between 12% and 14% in the majority of cantons.

Alternative minimum tax: No, except companies which own real estate.

Taxation of dividends: Dividends are taxable for the recipient company, although relief is granted for dividends received from a qualifying participation in a resident or non-resident company. A participation is considered qualifying where the recipient company owns at least 10% of the capital of the payer company or the value of the participation is at least CHF 1 million (participation exemption).

Capital gains: Capital gains form part of a resident company’s taxable profits. Gains from qualifying participations held for at least one-year benefit from the participation exemption (see dividends above).

Losses: May be carried forward for seven years and may be set off against any income or capital gains. Losses may not be carried back.

Foreign tax relief: Foreign-source income is included in taxable income, but relief is granted for dividend income from qualifying participations. Foreign-source income is taxed net of foreign taxes; no credit is granted for foreign tax paid (except for non-refundable withholding tax on dividends, interest and royalties under an applicable tax treaty).

Participation exemption: See above under ‘Taxation of dividends’ and ‘Capital gains’

Holding-company regime: There is no holding company regime.

Tax-based incentives: Incentives include: • Enhanced (150%) deductions for R&D expenditure • 90% relief for qualifying patent-box profits • Asset basis step-up upon the migration of a company or of its activities and functions to Switzerland • Transition rules for former incentives

Group relief/fiscal unity: No consolidated filing. Assets may be transferred intra-group at no gain/no loss provided they form a business unit.

Small company/alternative tax regimes: Not applicable

Corporate taxation: compliance

Tax year: Accounting period (cannot exceed 12 months except in the year of incorporation).

Consolidated returns: No

Filing and payment: There is a combined tax return filing for both federal and cantonal income tax purposes. A self-assessment procedure applies. Filing deadlines are provided by the cantons.

Penalties: No penalties for late filing or failure to file.

Rulings: Rulings may be obtained from the tax authorities on various Swiss tax matters. See also “Disclosure requirements” below.

Taxation of individuals

	Rates (1)
	Federal Income Tax
Upto CHF 28 299	0%
Gradualy increases	1%-13%
From CHF 895 900	11.5% max.
Capital gains earned as a business	Same as above
Capitcal gains earned in private wealth	0%

1. At the cantonal level, tax rates vary significantly, not only among the cantons, but also among the communities. The lowest of the maximum marginal tax rates (including federal income tax) was 22.21% in Wollerau, Canton of Schwyz. Comparable to the rates of some larger cities: Zug (23.16%), Lucerne (32.23%), Lausanne (42.5%) and Geneva (45.32%).

Residence: Individuals are essentially resident if they intend to stay in Switzerland permanently (as indicated by the location of their center of personal and business interests), if physically present for at least 30 days to carry out a professional activity or if physically present for at least 90 days (regardless of purpose).

Basis: Resident individuals are taxed on their worldwide income, except profits from foreign businesses, foreign branches and foreign immovable property, which are tax exempt. Non-residents are taxed on Swiss employment income, business profits and profits attributable to Swiss immovable property.

Taxable income: All income derived from compensation for work performed and income from capital (real and movable property) are subject to federal income tax. Income from foreign capital is taxed only after deduction of non-refundable foreign withholding taxes. Partial taxation applies to income from participations of at least 10%.

Capital gains: Capital gains and appreciation derived from the sale or realization of assets through the increased value of tangible and intangible assets of a business are subject to tax. Gains realized on the dale of shares or real property are not subject to federal tax. The cantons impose a separate capital gains tax for real property. No taxes are due for personal capital gains from movable property that is not considered an asset of a business.

Deductions and allowances: Various expenses may be deducted in computing taxable income, including interest on loans, alimony, transportation to the working location and certain donations. Personal allowances are granted to taxpayers, their spouses and dependent children.

Foreign tax relief: Relief is granted for dividend income form qualifying participations. Foreign source income is taxed net of foreign taxes; no relief is granted for foreign tax paid (except for non-refundable withholding tax on dividend, interest and royalties under an applicable tax treaty).

Taxation of individuals: compliance

Tax year: Calendar year

Filing and payment: Self-assessment. Spouses file combined. Tax on employment income is withheld by the employer only for foreign employees working temporarily in Switzerland or if residency of employee is outside Switzerland. Tax filing dates vary by cantons.

Penalties: Penalties apply for late filing or failure to file.

Rulings: See above under ‘Corporate taxation’.

Withholding taxes

Type of Payment	Rate		Non-residents
	Company	Individual	Company	Individual
Dividends	35% (1)	35%	35%	35%
Interest	0%/35% (2)	0%/35%	0%/35%	0%/35%
Royalties	0%	0%	0%	0%
Capital gains	0%	0%	0%	0%
Fees for technical services	0%	0%	0%	0%

1. Fully refundable to Swiss residents; fully refundable to EU recipients upon proper filing; partially refundable under many treaties
2. Only on interest derived from deposits with Swiss banks, bonds and bond-like loans. For refunds the same rules as above apply

Branch remittance tax: No such tax.

Anti-avoidance legislation

Transfer pricing: No formal TP legislation or documentation requirements but related party transactions have to be carried out at arm’s length terms. Generally, Switzerland follows OECD principles including CbC reporting requirements.

Interest restriction: Safe haven thin capitalization rules require a minimum debt-to-equity ratio for each asset class (e.g. receivables 85%, investment and intellectual property 70% etc.). In addition, safe haven interest rates apply.

Controlled foreign companies: No such regime

Hybrid mismatches: No special rules, but the participation exemption does not apply to income that is tax deductible in the source country

Disclosure requirements: CbC reporting for qualifying enterprises. Advance tax rulings may be subject to the spontaneous exchange of information.

Exit taxes: Only for businesses at the same rates as income taxes.

General anti-avoidance rule: Based on federal Supreme Court decisions applying to all Swiss taxes under the following conditions: • The taxpayer’s legal structure is unusual, inappropriate or inadequate having regard to its economic purpose • Tax considerations are deemed to be the only motive for the transaction and • The transaction effectively would lead to significant tax savings if it were accepted by the tax authorities. Measures against treaty abuse may apply, including base erosion test.

Value-added tax/Goods and services tax

Type of tax: Value-added tax (VAT) similar to EU model. Applies to supplies of most goods and services and to imports. There is a broad range of exempt supplies and zero-rated supplies (exempt but allowing for deduction of input tax).

Standard rate: As of 1.1.2024 new rate applies: 8.1% (up to 31.12.2023: 7.7%)

Reduced rates: 0%, 2.6%, 3.8%

Registration: Swiss businesses must register for VAT where taxable supplies have exceeded CHF 100 000. Voluntary registration possible.

Filing and payment: Quarterly return period, filing and payment within 60 days after end of quarter. Semi-annual and annual filing available for small and mid-sized company on request.

Social security contributions

The annual contribution is 10.6% of total employee remuneration (with no ceiling) and is divided between the employer and employee. Professional pension plans are mandatory for employees.

Self-employed

Progressive rate applies for self-employed, max. 10% on net income.

Other taxes

Capital duty: No

Immovable property taxes: Still apply in some cantons

Transfer tax: The transfer of securities by Swiss securities dealers is subject o a 0.15% tax on Swiss securities and a 0.3% tax on foreign securities.

Stamp duty: A 1% stamp duty applies on contributions to the equity of a Swiss company whether in cash or in kind. A CHF 1 million threshold applies. Reorganizations are exempt.

Net wealth/worth tax: Corporate net wealth tax is imposed at varying rates depending on the canton (typically between 0.001% and 0.5%). It maybe credited against the income tax liability in some cantons. There is no federal net wealth/net worth tax.

Inheritance/gift taxes: There is no federal inheritance and gift tax. Most cantons impose the tax. Inheritances/gifts to spouse and direct descendants are exempt in most cantons.

Other: Businesses with a registered office, domicile or PE in Switzerland that are VAT-registered and whose total annual turnover is at least CHF 500 000 are subject to the radio and television fee of between CHF 160 and CHF 49 925 depending on turnover.

Tax treaties

Switzerland has concluded over 100 full double taxation treaties on income and capital gains and has a small number of tax information-exchange agreements. It has 10 estate-tax treaties. It is also a signatory to the OECD Multilateral Instrument.