Company Taxes in Switzerland
If the company generates more than half of its revenue abroad, the tax rate in Switzerland will be subject to a federal flat tax rate of 8.5% on net income (Since income and capital taxes are deductible in determining taxable income, the effective tax rate (ETR) is 7.8%).
Otherwise, companies registered in Switzerland and that derive the bulk of their revenue from Switzerland are subject to three types of tax, which comprehensively range from 11.9% to 21.6% (ETR is between 12% and 22%). Taxes have been reduced in 2020 as part of wider corporate changes.
The three types of taxes:
- Cantonal and municipal taxes on capital: 1.8 per thousand if the company derives profit and 2 per thousand if it does not derive profit. To this tax base is added “additional surcharges”, which are cantonal and municipal. These surcharges may also be expressed as a percentage. If the company was founded between 2008 and 2011, it will not be subjected to these additional surcharges.
- Cantonal and municipal taxes on profit: the rate of the cantonal tax base on benefits for limited companies is 10% of the net income. “Additional surcharges”, which are cantonal and municipal, are also added to the tax base.
- Direct federal tax on profit: The tax rate on company earnings is 8.5% on the net income. In accordance with the practice of the Federal Tax Authority, taxable profit is always rounded off to the lowest hundred francs in the determination of tax.
