Company Taxes in Switzerland
Companies with their statutory seat or place of effective management in Switzerland are generally subject to Swiss corporate income tax on their profits.
Swiss corporate taxation is levied at three levels: federal, cantonal, and municipal. The overall effective tax rate depends primarily on the canton and municipality in which the company is established.
In practice, the combined effective corporate income tax rate in Switzerland typically ranges from approximately 11.9% to 20.5%, depending on location. For example, in Geneva, the combined effective rate is approximately 14.0% to 14.7%. Corporate tax rates were reduced across Switzerland as part of the Tax Reform and AHV Financing Act (TRAF) implemented in 2020.
The three types of taxes:
- Cantonal and municipal taxes on capital: Capital taxes are levied by cantons and municipalities on a company’s net equity. Rates vary depending on location and typically range from approximately 0.001% to 0.5% of taxable capital, depending on the canton and municipality.
- Cantonal and municipal taxes on profit: Cantonal and municipal profit taxes are levied on net taxable income with rates determined by the canton and municipality in which the company is established. Combined cantonal and municipal profit tax rates typically range from approximately 4% to 14%, depending on location.
- Direct federal tax on profit: Swiss federal corporate income tax is levied at a uniform rate of 8.5% on net profit after tax, corresponding to an effective tax rate of approximately 7.8%, as corporate income taxes are deductible for tax purposes.
