Setting Up a business in Switzerland: Fees & Taxes

SETTING UP FEES

Taxes

Statuary and effective income tax rates in Geneva, Lausanne, Zurich and Zug.

Tax Incentives

The tax environment is a key factor in deciding on a location for your company. Switzerland offers companies a very favorable tax environment with moderate overall taxation. Swiss federal corporate income tax is levied at a fl at pre-tax rate of 8.5%. When cantonal and communal income taxes are also considered, the overall ordinary tax rates can range from 7.8% to 25%, which is a very moderate level compared to other European countries.

In order to limit the number of tax controversies, the Swiss Tax Administration commonly attributes to companies a notional profit upon which tax is levied. Where coordination or management services are offered to group companies (e.g. technical, administrative or scientific assistance, including research and promotion activities), the profit assessable in Switzerland is generally considered to be 5% of total overhead.

Cooperative Tax Authorities

In addition to the low income tax burden, Switzerland is known for its traditionally cooperative and constructive relationships between taxpayers and tax authorities.

Advance tax rulings are extensively used in order to minimize future tax risks. Overall, the benefits of the Swiss tax system can play a significant role in the success of your company.

Tax Regime

Switzerland has a comprehensive group of income and capital tax treaties that provide for repatriation of profi ts with a minimal final withholding tax burden. Furthermore, Switzerland does not levy withholding tax on interest or royalty payments to foreign companies and has no controlled foreign corporation (CFC) laws in place. As an additional incentive, full or partial income and capital tax relief may be granted on federal, cantonal and municipal levels for up to ten years, depending on the number of jobs created in Switzerland through the investment project.