Taxation Benefits in Zug.

Enjoy extremely low rates of taxes!!!

1.1 Principles of taxation: Varying taxation

The Swiss tax system is characterized by various levels of direct taxation: direct federal tax and municipal taxes.
Moreover, the tax legislation in the individual cantons is often very different from each other. The cantons were, in fact, required to adapt their tax legislations per 1.1.2011 to the federal tax-harmonization law. The harmonization law did not in fact aim to make every canton adopt exactly the same tax legislation, important decisions, such as the fixing of tax rates and tariffs, continue to remain under the authority of the cantons.

The Canton of Zug has, with the revised tax law, further improved what were already conditions for legal entities and has strengthened its position as the canton with one of the lowest tax costs. Companies active in the canton of Zug will continue to enjoy the attraction location benefits. One decisive advantage of Zug as a business location, is however, not only the low rates of taxation but the uncomplicated, unbureaucratic communication between the cantonal tax authorities and the tax-payers.

1.2 Income and Capital Tax

Ordinary Tax rates for operating companies

1.3.Privileged taxation

Holding Companies

Tax basis

1. Income tax

The taxable net profit of a mixed company is assessed in accordance with divisional calculation
Taxable at the ordinary rate

• Investment income ( interest, dividends and capital gains) from domestic sources
• Income from intangible rights (licenses and trademarks) in Switzerland (up to 20%)
• Trading income from Switzerland (up to 20%)
• Double Taxation Treaty protected income (interest and royalties) where it is a condition that they are taxable in Switzerland
• Income form real estate in Switzerland (including impudent trend)

Income tax rates amount to:

• For the first CHF 100,000                                     4%
• For the income exceeding CHF 100,000          6.5%

Capital tax

Taxable basis is the equity of the company. The capital tax equals 0.01% of the taxable equity with a minimum of CHF 250, multiplied by the current cantonal and communal multiplier (Section 75, Paragraph 1 of the tax law). The equity consists of of paid in equity (share capital, original stock or capital), participation capital, declared and hidden reserves created from taxed profits as well as retained earnings. At the minimum, the paid in equity, including the paid in participation capital, is taxable (Section 72 of the tax law). The shareholders’ funds are calculated at the end of relevant tax period (Section 78 of the tax law).