Aargau Corporate Income Tax
Last updated: 10 Dec 2025
Aargau Corporate Income Tax — Profit Tax Rules
How corporate income tax works in the Canton of Aargau: who is subject to profit tax, how the tax base is derived from accounting profit, how the cantonal simple rate, the Aargau tax multiplier and direct federal corporate income tax interact (leading to an effective burden of around 15.1% in typical locations), and what to know about participation relief, STAF measures, loss carryforwards and permanent establishments.
Scope & Taxpayers
- Resident companies. Companies with statutory seat or effective place of management in Aargau are subject to unlimited tax liability on their worldwide income, subject to relief for foreign permanent establishments and immovable property under double tax treaties and intercantonal rules.
- Nonresident entities. Nonresident companies are limited tax liable in Aargau if they have local business operations, a permanent establishment, or Aargau–situs real estate. Only the profits attributable to the Aargau nexus are taxed.
- Juristic persons only. The corporate income tax described here applies to juristische Personen (AG, GmbH, cooperatives, certain foundations and associations). Partnerships and sole proprietors are taxed at shareholder/owner level under personal income tax.
- Tax period. The profit tax period for juristic persons generally follows the financial year. A change of year-end or an extended first business year must be coordinated with the tax office.
Tax Base: From Accounting Profit to Taxable Profit
Aargau corporate income tax is levied on the company’s taxable profit, determined by starting from statutory financial statements (usually Swiss GAAP or Code of Obligations accounts) and then making tax adjustments.
| Step | Description | Typical adjustments |
|---|---|---|
| 1. Accounting profit | Profit after tax per statutory financial statements for the relevant business year. | Profit as approved by the shareholders’ meeting, before appropriation of retained earnings. |
| 2. Add-backs | Non-deductible or partially deductible expenses are added back to profit. | Hidden profit distributions; excessive interest or royalties to related parties; non-business expenses; penalties; corporate income tax itself; some provisions. |
| 3. Deductions | Items that are tax deductible but not expensed, or expensed differently, are deducted. | Tax-allowed depreciation that exceeds accounting depreciation (within limits); specific provisions; participation relief; any Aargau patent box reduction and R&D super-deduction where applicable. |
| 4. Allocation & exemptions | Profits allocable to other cantons or foreign permanent establishments are exempt in Aargau under intercantonal and treaty rules. | Profit/loss attribution keys; separate determination of foreign PE income; treaty exemptions or credit methods. |
| 5. Taxable profit | Result after adjustments, before loss carryforwards and special reliefs. | Loss carryforwards of up to 7 years can be offset against current-year taxable profit (subject to general Swiss rules). |
The Aargau tax law (Steuergesetz des Kantons Aargau) and cantonal practice notes provide detailed guidance on depreciation, provisions, hidden equity, participation relief and STAF instruments. In practice, a clear reconciliation from accounting profit to taxable profit is expected as part of the corporate tax return.
Rates & Effective Burden
Cantonal & communal profit tax
In Aargau, standard capital companies and cooperatives pay a profit tax on net income at cantonal level, combined with a cantonal/communal multiplier (Steuerfuss).
For capital companies and cooperatives, the simple cantonal profit tax rate under § 75 StG is, as from the 2024 tax period, a flat 5.5% of taxable net profit. This simple tax is multiplied by the Aargau tax rate (Steuerfuss) for juristic persons, which for 2025 totals 167% across ordinary cantonal tax and surcharges. This yields a combined cantonal/communal profit tax burden of a bit over 9% on taxable profit before federal tax, depending on the exact year and parameters.
The former two-tier tariff (5.5% up to CHF 250,000 and a higher rate on the excess) has been phased out and replaced by the single 5.5% rate, in line with Aargau’s staged reduction of the corporate tax burden.
For simulations of Aargau corporate profit tax before federal tax and capital tax, see the official cantonal calculator for juristic persons under Steuerberechnung & Tarife (juristische Personen) and the Rates page on this hub.
Federal corporate income tax & combined rate
In addition to cantonal/communal profit tax, companies pay Swiss direct federal corporate income tax at a flat rate of 8.5% on profit after tax. Because federal tax itself is deductible, this corresponds to an effective rate of roughly 7.8% on profit before tax.
Aargau positions itself as an internationally competitive location, with a targeted combined (cantonal, communal and federal) corporate income tax burden of around 15.1% on profit before tax in typical municipalities once the staged reductions are fully in force. Actual effective rates vary by commune and tax year.
The combined effective Aargau corporate income tax rate for a given company therefore depends on:
- Taxable profit (after participation relief and STAF instruments);
- The Aargau tax period (tariff step-up of prior years vs. 5.5% flat);
- The applicable communal share embedded in the tax multiplier; and
- Interaction with direct federal tax and deductibility of taxes.
The Aargau tax calculator on this hub is designed to model combined cantonal, communal and federal profit tax for a given level of taxable profit and location.
Participation Relief & STAF Measures
Aargau follows federal rules for participation relief and has implemented key STAF (Swiss corporate tax reform and AHV financing) measures at cantonal level, including a patent box and an additional deduction for research and development (R&D). Both instruments are subject to an overall relief cap.
| Mechanism | Overview | Typical planning aspects |
|---|---|---|
| Participation relief | Qualifying dividends and capital gains from shareholdings in subsidiaries are effectively taxed at a reduced rate via a participation deduction calculated on the basis of net participation income relative to total profit. | Minimum shareholding thresholds (e.g. 10% or CHF 1m market value); holding period; treatment of write-downs and liquidation proceeds; interaction with foreign withholding tax and treaty relief. |
| Patent box | Aargau applies a cantonal patent box for income from qualifying intellectual property. Up to 90% of qualifying patent income can benefit from a reduced tax base, subject to the OECD nexus approach and tracking of R&D expenditure. | Segregation of IP income and expenses; documentation of R&D functions; alignment with the nexus approach; interaction with existing IP structures and transfer pricing; ruling practice with the tax administration. |
| R&D super-deduction | Aargau offers an additional deduction for qualifying R&D costs. Up to 50% of qualifying R&D expenditure can be deducted on top of the business-justified expense, including a percentage of eligible third-party R&D mandates, subject to local rules. | Defining qualifying R&D activities; distinguishing in-house vs. outsourced R&D; ensuring documentation and cost allocation support the deduction; coordination with the patent box (including Aargau’s treatment of previously deducted R&D upon entry into the patent box). |
| Notional interest deduction (NID) | Notional interest deduction is not currently available in the Canton of Aargau. However, group financing structures and interest limitation rules must still be monitored in light of thin-capitalisation practice and evolving reforms at federal and cantonal level. | Managing equity vs. debt funding; avoiding hidden equity recharacterisation; considering alternative jurisdictions or entities for treasury functions; monitoring future legislative developments. |
The overall relief from participation deduction, patent box and the R&D super-deduction is subject to a maximum relief cap at cantonal level: at least 30% of taxable profit must remain subject to ordinary taxation. Individual structuring and advance tax rulings are common for larger businesses.
Losses, Groups & Permanent Establishments
- Loss carryforwards. Tax losses can generally be carried forward for up to 7 years and offset against future taxable profits in Aargau, within the standard Swiss framework. There is no loss carryback.
- Group situation. Switzerland has no full fiscal unity or tax consolidation regime for ordinary corporate income tax. Each Aargau legal entity files its own return; group effects are managed via financing, transfer pricing, participation relief and, where relevant, group VAT registration.
- Intercantonal allocation. Where a company has operations, real estate or permanent establishments in several cantons, profit and capital are allocated using generally accepted keys (e.g. payroll, assets, turnover) based on practice and jurisprudence. Aargau applies these nationwide principles in line with its tax law.
- Foreign permanent establishments. Under many treaties, profits attributable to foreign permanent establishments are exempt in Switzerland with progression. Accurate attribution of profits and capital, and consistent transfer pricing, are essential to support the exemption for Aargau and federal tax.
- Restructurings. Mergers, de-mergers, contributions in kind and migrations of seat can be tax neutral if Swiss conditions are met (continuity of business, carryover of hidden reserves, adequate consideration, etc.). Advance rulings are often used to secure treatment for Aargau and federal purposes where significant assets, losses or hidden reserves are involved.
Interaction with Capital Tax
Corporate income tax and capital tax are closely linked in Aargau. Profit tax is levied annually on taxable income, while capital tax is levied on the company’s equity. Both taxes are assessed based on the same return for juristic persons.
- Capital companies and cooperatives are subject to a simple cantonal capital tax of 0.75‰ of taxable equity under § 86 StG, multiplied by the applicable tax rate (Steuerfuss). The reduction from the earlier 1.25‰ rate forms part of Aargau’s STAF implementation.
- The level and stability of equity influence the company’s overall tax burden: higher equity increases capital tax, but may reduce thin-capitalisation risks and recharacterisation of related-party interest for profit tax purposes.
- For holding and IP-rich structures, the combination of lower capital tax, participation relief and the patent box can shift the relative importance of profit vs. capital tax. The optimal mix often depends on the group’s long-term strategy and financing profile.
- For details on rates and base, see the Aargau capital tax page and the combined tax calculator.
Compliance Snapshot
This guide focuses on the substantive rules for corporate income tax in Aargau. For procedural aspects — who files, which forms to use and which deadlines apply — see the dedicated Forms & deadlines page.
| Area | Key points |
|---|---|
| Filing | Annual corporate tax return for juristic persons, typically via the Aargau e-filing tools for companies. The same return covers cantonal, communal and direct federal tax on profit and capital. |
| Deadline | As in other cantons, filing deadlines are generally several months after financial year-end. Standard extensions are usually available on request; longer extensions may require specific justification or professional representation. |
| Documentation | Signed financial statements; profit-to-tax reconciliation; schedules for participation relief, patent box and R&D deduction; capital tax computation; transfer pricing documentation where relevant; rulings and supporting correspondence. |
| Assessments & objections | Combined assessments for cantonal, communal and federal tax. Objection rights and deadlines are set out in the assessment notice. In complex situations, it is common to coordinate Aargau and federal positions proactively via rulings rather than relying solely on ex-post objections. |
FAQs
How high is the corporate income tax rate in Aargau?
For standard capital companies and cooperatives, Aargau applies a simple cantonal profit tax rate of 5.5% on taxable net profit (from the 2024 tax period), multiplied by the Aargau tax rate (Steuerfuss) for juristic persons, which is 167% for 2025. On top of this, companies pay direct federal corporate income tax at 8.5% of profit after tax (about 7.8% before tax). In many cases this results in a combined effective corporate income tax burden of roughly 15.1% on profit before tax, though the precise rate depends on the commune and tax year. For concrete examples, see the Rates page or the official Aargau tax calculator for juristic persons.
What is the difference between profit tax and capital tax in Aargau?
Profit tax is charged on the company’s taxable income for the year, after adjustments and reliefs. Capital tax is charged on the company’s equity (share capital, reserves and hidden equity) as of the balance sheet date, at a simple rate of 0.75‰ multiplied by the Aargau tax rate. Both are levied annually and assessed together, but they operate on different tax bases and tariff structures.
Are dividends from subsidiaries fully taxed in Aargau?
No. Qualifying participations can benefit from participation relief. This mechanism reduces the effective tax burden on net participation income (dividends and certain capital gains) based on a formula comparing participation income to total profit. Where the conditions are met, the effective Aargau and federal tax on qualifying dividends can be reduced significantly, sometimes to the low single digits.
How are losses treated for Aargau corporate income tax?
Tax losses can generally be carried forward for up to seven years and offset against future taxable profits. There is no loss carryback. In restructurings or changes of ownership, special rules may limit the use of losses; advance tax rulings are often used where material loss carryforwards are involved or when changing the functional profile of an Aargau entity.
Does Aargau offer patent box and R&D special deductions?
Yes. As part of STAF implementation, Aargau offers a patent box with up to 90% relief on qualifying patent income and an additional deduction of up to 50% on qualifying R&D expenditure. Both instruments are subject to a 70% overall relief cap together with participation relief, so at least 30% of profit remains fully taxable.
Can I get a ruling on a planned structure or transaction in Aargau?
Yes. Aargau, like other Swiss cantons, offers advance tax rulings. These are commonly used for holding and financing structures, IP arrangements, reorganisations, application of STAF instruments and the treatment of losses. A well-prepared ruling request can provide valuable certainty on the corporate income tax treatment and its interaction with capital tax and federal tax.
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