Changes in corporate taxation in Switzerland
By Marc Nideröst, Treuhand- und Revisionsgesellschaft Mattig-Suter & Partner
Switzerland is one of the most attractive locations for domiciles in Europe. The effective corporate tax rate varies between 11.6% of pre-tax profits in Wollerau, Canton of Schwyz (often seen as one of the most favourable tax municipalities in Switzerland), to 24.1% of pre-tax profits in the City of Geneva. The average corporate tax rate is at 17.92% of pre-tax profits (base 2014).
Some corporations (known as mixed and domiciliary companies), whose business activities have a largely non-domestic focus and which exercise only a secondary business activity in Switzerland, enjoy reduced tax privileges at cantonal level (i.e. a tax base of only 10 % to 20 % of the non-domestic income). Holding companies, whose purpose and principal function comprises the long-term administration of participations, pay only federal taxes, but no cantonal profit taxes.
This kind of taxation has caused tax conflict with the EU and the OECD. For this reason, Switzerland will change its corporate taxation laws, abolishing the privileges mentioned above. The UK’s patent box model and the Belgian approach of a notional interest deduction will both be examined as possible replacements in tax policy. However, any changes will not come into effect before 2018 or 2020.
Treuhand- und Revisionsgesellschaft Mattig-Suter & Partner, Altdorf, Brig, Schwyz, Zug, Switzerland
T: +41 41 819 54 00
Treuhand- und Revisionsgesellschaft Mattig-Suter und Partner, Canton of Schwyz, has been conducting business since 1960 and employs around 90 staff in total. The partnership provides market services in the areas of auditing, finance and accounting, tax consulting, business consulting and mediation as well as legal consulting, and its size means it has highly qualified specialists in all areas.
Marc Nideröst, Swiss, Certified Tax Expert, Graduate of University of Applied Sciences in Economic and Business Administration, is the Leader of the Tax consulting department at Treuhand- und Revisionsgesellschaft Mattig-Suter und Partner and has specialised in the area of taxation over the past few years, especially for regional, national and international enterprises, as well as in the field of value added taxation.
published: June 2014