Tax rates in Switzerland

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 are taxed on their Swiss-sourced income (through their permanent establishment/branch income and/or immovable property located in Switzerland). 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, charitable contributions are deductible up to 20% of the net profit after tax, provided certain criteria are met.

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.
Moreover, 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 and 1% on income above
- 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.

Other Domestic Resources

Swiss Federal Tax Administration

Tax Rate

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 2023, couples with two wage earners can deduct up to CHF 13,600 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 6,600 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 and insurance allowances are often deductible. Other deductible expenses include business income expenses, social security premiums and interest on loans.

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.