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.
VAT in Switzerland: A Swiss VAT number can be obtained on application and is compulsory from a turnover of CHF 100,000. The Swiss VAT rate is 7.7%.
