Corporate TaxationThe Swiss tax system is three-tiered and includes federal, cantonal, and municipal taxes. The overall tax burden depends on the canton of registration and the place of effective business activity.
Federal Corporate Income Tax (CIT):The base federal rate is 8.5%. The tax is levied on profit after tax, which corresponds to an effective rate of approximately 7.83% on a pre-tax basis.
Cantonal and Municipal Taxes:These taxes are set at the cantonal and municipal levels and have a significant impact on the total effective tax burden.
Examples of effective combined corporate tax rates (CIT):
Zug11.8%–12.0% effective combined corporate income tax
One of the lowest-tax cantons, commonly used for holding and international operating structures.
Zurich19.5%–21.0% effective combined corporate income tax
A major financial and business hub with developed infrastructure and a higher tax burden.
Withholding TaxSwitzerland applies a 35% withholding tax on dividends and certain types of capital income.
The rate may be reduced or fully refunded under applicable double tax treaties (DTT) and subject to compliance with the relevant conditions, including the EU Parent–Subsidiary Directive.
VAT (MWST / VAT)8.1% – standard rate
2.6% – reduced rate
3.8% – special rate for the hotel and accommodation sector
Reporting and AuditAnnual financial reporting is mandatory for all companies.
An ordinary audit is required if two out of the following three criteria are exceeded over two consecutive years:
- CHF 20 million in total assets
- CHF 40 million in turnover
- 250 employees
For small businesses, a limited audit generally applies. With the consent of all shareholders, a full audit opt-out is possible if the average workforce does not exceed 10 FTE.