Cantonal/communal + federal (profit tax)

The effective corporate income tax burden in Appenzell Ausserrhoden is obtained by stacking:

• Cantonal/communal profit tax at a flat 6.5% on net profit (before tax) for capital companies; and
• Swiss direct federal corporate income tax at 8.5% of profit after tax, which corresponds to about 7.8% of profit before tax because the tax is deductible.

According to the canton’s economic development office and independent tax comparisons, this leads to a combined effective corporate income tax rate of around 13.04% of profit before tax for a typical company (canton, communes and federal level combined, before considering special reliefs).

In a Swiss-wide comparison of cantonal capitals, Appenzell Ausserrhoden ranks among the lowest-tax cantons for companies, with a combined rate around 13.0–13.1%, only slightly above Zug and Nidwalden and clearly below mid- and high-tax cantons such as Bern or Zurich.

The actual effective rate for a specific company will depend on:

• The tax year and applicable multipliers;
• The municipality (small variations via tax multipliers);
• Use of participation relief (for qualifying dividends and capital gains on participations);
• Any special rulings, step-ups or transitional regimes; and
• Structuring of permanent establishments and cross-cantonal allocation of profits.

Illustrative example (Herisau)

Assume a standard capital company in Herisau with:

• Taxable profit before tax: CHF 1,000,000;
• Taxable equity: CHF 2,000,000;
• No special patent box or R&D instruments in use; and
• No special status or tax holidays.

Then, very roughly:

• A combined cantonal/communal and federal corporate income tax burden of around CHF 130,000–135,000 (approx. 13–13.5% of profit before tax) is plausible based on the published 13.04% benchmark.
• At a combined capital tax burden of roughly 0.047% of equity, capital tax on CHF 2,000,000 is about CHF 950 per year. If the calculated capital tax falls below the statutory minimum (around CHF 900), the minimum capital tax applies instead.
• In a normal-profit year such as this example, profit tax is by far the dominant burden; capital tax is modest and acts mainly as a floor in low-profit or loss years.

For binding figures, use the Appenzell Ausserrhoden tax administration’s calculator for juristic persons for the relevant tax year and municipality.

Capital tax & minimum capital tax

Appenzell Ausserrhoden levies a capital tax on the equity of juristic persons. For capital companies and cooperatives:

• The combined capital tax burden (canton + communes) is approximately 0.04745% of taxable equity for a reference tax multiplier, according to official English-language investment materials.
• The capital tax is subject to an annual minimum capital tax on companies of roughly CHF 900. In some tax comparisons, a very similar figure of CHF 876 per year is quoted, reflecting the minimum translated via a specific tax multiplier and year.
• Taxable equity includes paid-in share, foundation or quota capital, open reserves, hidden reserves arising from taxed profits and hidden equity.

The combined effect is that:

• For companies with modest equity, the minimum capital tax (around CHF 900) will often be the relevant annual capital tax burden, especially in loss years.
• For capital-intensive companies with high equity, the per-mille-based capital tax can exceed the minimum, but the low rate keeps the overall capital tax modest in an inter-cantonal comparison.
• In profitable years, profit tax tends to dominate the overall burden; capital tax is most relevant as a floor or in combination with loss situations and participation relief.

For entities with ideal or charitable purposes (juristische Personen mit ideellen Zwecken), the cantonal law provides that profits up to a certain threshold (e.g. CHF 20,000) are exempt if used exclusively and irrevocably for those purposes; such entities may also benefit from favourable capital tax thresholds.

Participation relief & holding aspects

Appenzell Ausserrhoden does not maintain old-style holding or mixed company regimes. Instead, it relies on:

• A low ordinary corporate income tax rate (13.04% combined, including federal tax), and
• The standard Swiss participation relief on qualifying dividends and capital gains from participations.

For qualifying participations (e.g. at least 10% shareholding or a participation with a fair market value of at least CHF 1 million), the canton reduces the profit tax burden on dividends and capital gains in line with federal rules, thereby mitigating economic double taxation.

Combined with the low ordinary tax rate and modest capital tax burden, this makes Appenzell Ausserrhoden an attractive location for holding and mixed structures, especially for medium-sized groups that are not yet in full scope of Pillar 2 global minimum taxation.