Doing Business in Switzerland: Taxation in Switzerland

Due to Swiss federal structure, there is no uniform taxation system. Taxes may be levied at federal, cantonal and communal levels. Some taxes, as Value Added Tax (VAT), are levied only by the Federal State, while other forms are simultaneously raised at several levels, like federal and cantonal.

Direct & Indirect Taxes

Switzerland levies both direct and indirect taxes include in particular VAT – which has significantly lower rates than in the other countries of EU, withholding tax and stamp duty on certain transactions.

Direct taxes are available both to individuals and corporations that make Switzerland so attractive for certain taxpayers.

Individuals and corporations resident in Switzerland are normally subject to tax on their worldwide income and assets, respectively on their worldwide projects.

Persons not resident in Switzerland may under certain circumstances be subject to limited taxation on certain Swiss source income.

Direct taxes are levied by the Federal State (Direct Federal tax) and by the cantons and/or municipalities. Direct Federal Tax is governed by the Direct Federal Tax Act, whereas Cantonal/communal tax is levied pursuant to the cantonal law of the canton concerned.

Corporate Income Tax

Corporate tax rates on profit are also dependent on canton and commune.

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

Assumptions:
Income before direct taxes: 1’000’000
Equity: 8’000’000