Corporate Taxes in Switzerland

Taxes are essential to consider when starting a business in a developed country like Switzerland. This article will discuss the corporate taxes in Switzerland and shed light on factors to consider before expanding internationally.

Factors to Consider

Switzerland is known for its beauty and dynamism, offering a high standard of living and a highly educated workforce. However, the high cost of living and expensive real estate in Switzerland are crucial factors to weigh.

For online businesses not planning to reside in Switzerland, immigration policies may not be a concern, but import-export duties should be considered.

Budgeting for high costs is important, as Switzerland boasts some of the world’s highest wages and relatively expensive real estate. Real estate costs should be researched in different Swiss cities to find the most competitive market.

Switzerland’s diverse landscape and lifestyles across its 26 cantons offer various business opportunities. The best location for your business in Switzerland will depend on costs, competition, target audience, and workforce, and conducting in-depth research is necessary to determine the ideal location.

Corporate Taxes in Switzerland

Corporate residency in Switzerland is granted when the legal headquarters or domicile of a company is located within Swiss borders. Permanent establishment (PE) is significant for Swiss tax regulations, signifying a fixed business location responsible for the operational activities of a company.

As of July 20, 2023, resident companies operating in Switzerland are liable to pay Corporate Income Tax (CIT) on profits generated within the country, imposed at the federal, cantonal, and communal levels. Non-resident companies may become subject to Swiss CIT under various circumstances, with the approximate range of the maximum CIT rate on profits before tax falling between 11.9% and 21.0% based on the corporate residence location within a specific canton in Switzerland.

Switzerland imposes various federal excise taxes, securities transfer tax, issuance stamp tax, and property taxes in addition to CIT. Employers handle social security contributions on behalf of employees in the Swiss social security system that includes old-age, survivors, and disability insurance. The taxable period in Switzerland is the business year, matching the accounting period that can end on any date in a calendar year, and companies file annual tax returns for corporate income and capital taxes, with tax payment made when a demand is received based on the provisional or final assessment.