Switzerland flag Switzerland: Business Environment

Tax rates in Switzerland

Tax Rates

Consumption Taxes

Nature of the Tax
Value-Added Tax (VAT) - Mehrwertsteuer (MWST)
Tax Rate
8.1% as of 2024
Reduced Tax Rate
A reduced rate of 2.6% applies to: food and drinks (except those provided by hotels and restaurants); e-books, e-newspapers and e-magazines; drugs; and tap water.
A special rate of 3.8% applies to the hotel and lodging industry (including breakfast).
The following items are zero-rated: exports of goods and services; supplies of certain goods and services to airlines; services with the place of supply abroad; and supplies of investment gold.
Other Consumption Taxes
Federal and cantonal governments levy excise taxes on a number of products. To name a few, the following taxes are levied at the federal level:

  • Petroleum tax
  • Performance-related Heavy Vehicle Charge
  • National road tax (motorway tax sticker)
  • Beer excise tax/Tax on alcohol
  • Tobacco excise tax
  • Radio and television fee

Private households pay a radio and television fee of CHF 335. Companies with a registered office, domicile or PE in Switzerland that are VAT-registered and whose total annual turnover (excluding VAT) is at least CHF 500,000 are subject to the radio and television fee of between CHF 160 and CHF 49,925, according to the turnover.

Return to top

Corporate Taxes

Company Tax
8.5% (the tax is deductible for tax purposes and reduces the applicable tax base, resulting in a direct federal CIT rate on profit before tax of approximately 7.83%)
Tax Rate For Foreign Companies
Resident companies are taxed on their worldwide income, except for profits derived from foreign branches and foreign immovable property, which are tax-exempt. Non-resident companies may be subject to Swiss corporate income tax (CIT) if they have a permanent establishment (PE) in Switzerland, own real estate in Switzerland, are partners in a Swiss business, hold loan receivables secured by a mortgage on Swiss real estate, or engage in transactions involving Swiss real estate property, including acting as brokers.
Some cantons provide special tax and other benefits to attract investments in specific domains and locations.
Capital Gains Taxation
There is no specific capital gains tax levied at the federal level. Capital gains on the sale of assets (including real property) are treated as ordinary business income, regardless of how long the assets have been held. If assets are sold to a shareholder or related company at a less than a fair market price, gains may be reassessed for tax purposes. Capital losses are deductible.
Where the participation exemption applies, capital gains will be exempt from tax. To qualify, the participation must be at least 10% and held for more than one year. Participation relief is granted, however, only on the capital gain exceeding the investment cost of the sold participation (e.g. not on recaptured depreciation).
Main Allowable Deductions and Tax Credits
In general, all expenses that are booked in the statutory accounts and have been incurred in the course of business are tax-deductible.
Corporate income and capital taxes paid to the federal government, as well as to the cantons and the municipalities, are tax-deductible, so as indirect taxes (e.g. real estate transfer tax, import duties and foreign taxes not covered under unilateral or tax-treaty relief provisions). Bad debt provisions are tax-deductible.

Royalty payments are generally deductible for tax purposes if they are at arm’s length, the same as for payments to foreign affiliates. When they are recognised as an expense in the statutory books, costs incurred for job-related training and continuing education of employees are generally tax-deductible, the same as the cost of employee share plans and stock option plans.
At the federal level, companies can deduct charitable contributions of up to 20% of their net profit (after tax) if certain conditions are met. These contributions must be made to Swiss legal entities exempt from taxation due to their public welfare or exclusively charitable purpose, or the Swiss Federation, a Swiss canton or municipality, or their agencies ('Anstalten'). Most cantons follow similar rules and thresholds. Sponsorship contributions are deductible only if they are commercially justified, with no specific limits.

Swiss R&D personnel expenses and expenses for third-party R&D contracts in Switzerland can enjoy an additional super deduction of up to 50% at the request of the taxpayer.
Losses may be carried forward for seven years. The carryback of losses is not permitted.

Companies in the canton of Zurich can benefit from a notional interest deduction on excess equity generally based on the 10-year Swiss government bond rate.
Tax incentives are provided at the canton level for newly established enterprises and qualifying existing companies that make substantial changes to their businesses. Further tax incentives are provided at the federal level for establishing new businesses in qualifying areas of economic development and the creation of new jobs. The Swiss government introduced a Patent Box scheme as well as tax incentives for research and development and other tax privileges in line with OECD standards. Under this scheme, profits from intangible rights that qualify for Patent Box relief are tax-deductible up to a maximum of 90%, while R&D costs can be deducted up to a maximum of 150% of the costs sustained.

Other Corporate Taxes
Issuance stamp tax (also known as "capital duty") on the issuance and the increase of the equity of Swiss corporations is levied at the rate of 1% on the fair market value of the assets contributed, with an exemption on the first CHF 1 million of capital paid in, whether it is made in an initial or subsequent contribution.

Corporate net wealth tax is only levied at the cantonal and the communal level (not at the federal level). It is based on a corporation’s equity, with rates varying between 0.001% and 0.5%, depending on the corporate residence in Switzerland. The tax may be credited against the income tax liability in several cantons.

Transfer tax on immovable property is levied by most cantons and sometimes by the municipalities, but not by the federal government. Some cantons levy a real property tax. The transfer of securities is also subject to a tax at a rate of 0.15% for securities issued by a tax resident of Switzerland and 0.3% for securities issued by a tax resident of a foreign country.
Inheritance and gift taxes may be levied at the cantonal level.

Companies with a registered office, domicile or PE in Switzerland that are VAT-registered and whose total annual turnover (excluding VAT) is at least CHF 500,000 are subject to the radio and television fee of between CHF 160 and CHF 49,925, according to the turnover.

Social security contributions are as follows (shared equally between employers and employees):

- Old-age, survivors’ and disability insurance: 10.6%
- Unemployment insurance: approx. 2.2% on income up to CHF 148,200
- Occupational pension scheme: varies according to the specific pension plan (between 0.3% and 3.5%, generally paid only by the employer)
- Occupational accident insurance: approximately 0.17%, paid only by the employer
- Occupational pension scheme (2nd pillar): varies based on the specific pension plan.

Other Domestic Resources
Swiss Federal Tax Administration

Country Comparison For Corporate Taxation

  Switzerland OECD United States Germany
Number of Payments of Taxes per Year 19.0 10.1 10.6 9.0
Time Taken For Administrative Formalities (Hours) 63.0 163.6 175.0 218.0
Total Share of Taxes (% of Profit) 28.8 41.6 36.6 48.8

Source: Doing Business, Latest available data.

Return to top

Individual Taxes

Tax Rate

Individual income tax rates Income tax rates are progressive at the federal level and in most of the cantons.

Rate includes Federal Tax (13.2% maximum), Cantonal Tax (ranges from 14% to 35%), Communal Tax and Church Tax.

Federal level from 0.77% (for single taxpayers, first CHF 18,300 are exempt) and 1% (for married taxpayers, first CHF 31,800 are exempt) to a maximum rate of 13.2%.
For taxable income above CHF 928,000 (upper bracket) the overall tax rate will be 11.5%.
Cantonal level (maximum rate) The rates vary according to the canton, and sometimes even at municipal level.
For a detailed list of the applicable tax rates, click here
2024 tax burden for individuals Tax rates for the different cantonal capitals (single taxpayers, including 11.5% federal tax)
Jura 38.47%
Basel-Land 40.73%
Lucerne 30.03%
Geneva 43.33%
Bern 41.07%
Vaud 41.50%
Zurich 37.18%
Ticino 37.64%
Basel-Stadt 37.83%
Neuchâtel 38.9%
Valais 37.75%
Solothurn 33.45%
Fribourg 33.37%
Aargau 33.33%
Grisons 30.20%
Thurgau 30.60%
Glarus 31.68%
St. Gallen 29.39%
Schaffhausen 28.33%
Appenzell A.Rh 29.57%
Nidwalden 24.30%
Appenzell I.Rh 25.38%
Uri 26.06%
Zug 22.67%
Schwyz 22.59%
Obwalden 25.73%
Allowable Deductions and Tax Credits
Personal deductions vary according to the status of each person (single person, married, dependent child, etc.) and may be granted on both the federal and cantonal levels. In 2024, couples with two wage earners can deduct up to CHF 13,900 each from their taxable income for the tax year. For married couples, federal income taxes will be applicable from a taxable income of CHF 28,800. The child deduction amounts to CHF 6,700 each. Furthermore, a maximum deductible amount of CHF 3,200 can be claimed for commuting expenses to and from work.

Alimony and subsistence payments paid to minor children are tax-deductible for the payer and taxable for the recipient for federal tax purposes and in many cantons. Donations made to a qualifying Swiss-based charity organisation can be deducted (capped at the federal or cantonal level with a certain ratio of the taxable income).
A deduction can be claimed on the tax return for maintenance costs for self-owned real estate (actual or lump-sum). A deduction can be claimed on the tax return for certain bank charges.

Medical care expenses are often deductible. Other deductible expenses include business income expenses, social security premiums and interest on loans.
Generally, actual insurance premiums are not deductible. However, some cantons may offer a standard, capped deduction for insurance premiums, with the amount varying based on the taxpayer's status (e.g., married, single, or number of children).

Special Expatriate Tax Regime
Residents are subject to income tax on their worldwide income, except for profits from foreign businesses, branches and property, which are tax-exempt. Non-residents are taxed on Swiss-sourced income only (on Swiss employment income, business profits, and profits attributable to Swiss immovable property).
Expatriates working in Switzerland are subject to the same personal income tax rates as Swiss nationals.

Return to top

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
Double Tax Treaties signed by Switzerland
Withholding Taxes
Dividends: 35%; Interest: 0/35% (if derived from deposits with Swiss banks, bonds and bond-like loans; or if paid to non-resident on receivables secured by Swiss real estate); Royalties: 0%.
Bilateral Agreement
The United Kingdom and Switzerland are bound by a double taxation treaty.

Return to top

Sources of Fiscal Information

Tax Authorities
Swiss Federal Tax Administration
Other Domestic Resources
Swiss Official Web Portal ch.ch

Return to top

Any Comment About This Content? Report It to Us.

 

© eexpand, All Rights Reserved.
Latest Update: July 2024