Business activities may be subject to income tax or profit tax.
The following legal entities are subject to profit tax:
– corporations and cooperatives;
– associations, foundations and other legal entities.
Foreign legal entities as well as foreign commercial companies subject to tax and other foreign entities without legal personality are treated in the same way as domestic legal entities to which they are legally or factually most similar.
Individuals and partnerships may be subject to income tax.
Legal entities are subject to unlimited profit tax liability if they have their management or registered office in Switerland. However, the tax liability does not extend to business operations, permanent establishments and real estate abroad.
Legal entities abroad have limited tax liability for their business activities in Switzerland.
Tax residency for Individuals and partnerships is based on domicile or substancial presence in Switzerland (see Income Tax Guide).
In the case of legal entities with unlimited tax liability, taxable income is determined on the basis of the annual financial statements, taking into account any tax adjustments.
Business activities of individuals and partnerships have taxable income from self-employed activity.
Federal Tax Rates for Switzerland
The profit tax of corporations and cooperatives is 8.5 percent of net profit.
Regarding income tax rates, please see our income tax guide.
An additional profit tax is levied in the cantons. The total tax burden including the 8.5% federal profit tax is therefore approx. between 12 and 21%.
Regarding the income tax burden please see the Income Tax Guide.
Profit & Income Tax Schedule
Profit & Income tax are annual taxes. The basis for its assessment is determined for each calendar year.
The deadline for filing the return is based on cantonal regulations. In most cantons, the deadline is March 31 of the following year. For self-employed income, there are sometimes special regulations with deadlines until May of the following year. For legal entities, the deadline is usually between July and September of the following year. Deadline extensions are possible.
Payments must be made no later than 30 days after the due date.. Interest is assessed for late payments.
Deliveries of goods and services within the territory of Switzerland give rise to VAT levied on gross sales. Exports and services abroad are exempt from VAT. Any legal entity conducting a business is liable for this tax. Anyone who generates sales from taxable supplies of less than CHF 100,000 within a year is exempt from the tax. The normal VAT rate is 8%, a low rate compared to other EU countries. For certain goods and services the rate is even lower, only 2.5%.
Real Estate Transfer Tax
The (so-called) transfer of ownership tax is a tax levied in Switzerland on the acquisition of real estate and is regulated by the cantons. It is used to tax the change in the power of disposal over a property. In particular, the transfer of ownership of a property and the transfer of the economic power of disposal over a property (acquisition of a majority interest in a real estate company) are deemed to be taxable changes of ownership.
Since this tax is regulated on a cantonal basis, each canton has its own regulations. The tax rates are different in each canton and range up to about 3.3%.