Geneva Capital Tax
Last updated: 14 Dec 2025
Geneva Capital Tax — Equity Tax Rules
How capital tax works for companies in the Canton of Geneva: who is subject to the equity tax, how the taxable capital base is determined, how Geneva’s capital tax rate structure and minimum tax mechanisms work in practice, which reliefs may apply (e.g. participations), and how capital tax interacts with corporate income tax and compliance.
Scope & Taxpayers
- Resident companies. Geneva capital tax applies to companies with statutory seat or effective place of management in the Canton of Geneva (AG, GmbH, cooperatives and other personnes morales), on their equity allocable to Geneva.
- Nonresident entities. Nonresident companies are subject to Geneva capital tax to the extent they have a permanent establishment in Geneva or own Geneva-situs real estate; the tax base is the equity attributable to those Geneva factors.
- Tax period and valuation date. Capital tax is assessed annually. The balance sheet is the starting point, and adjustments can apply where accounts do not reflect tax values or where hidden equity is identified (e.g. excessive related-party debt).
- Legal form. This page focuses on capital companies and cooperatives. Associations, foundations and charitable entities may be exempt or subject to distinct rules.
Tax Base: Equity & Hidden Equity
For Geneva capital tax, the taxable base is equity (capital propre) attributable to Geneva under cantonal and Swiss inter-cantonal allocation principles: paid-in capital, open reserves, retained earnings, and (where relevant) hidden equity / taxed hidden reserves.
| Component | Included? | Comment |
|---|---|---|
| Share/paid-in capital | Yes | Included in the capital tax base for AGs and GmbHs based on the registered amount. |
| Open reserves | Yes | Legal reserves, voluntary reserves and retained earnings form part of taxable equity. |
| Hidden reserves / goodwill | Yes, in principle | Where hidden reserves are taxed and/or must be recognised under Geneva practice (e.g. certain migrations/restructurings), they can affect the equity base. |
| Revaluation reserves | Yes | Revaluation reserves and step-up amounts increase the equity base once recorded (subject to any transitional treatment). |
| Shareholder financing (thin-cap risk) | Partially | Excessive shareholder loans may be recharacterised as hidden equity, increasing taxable capital and affecting interest deductibility (profit tax). |
| Participations | Yes, but often relieved | Qualifying participations generally drive relief mechanisms (profit tax participation relief and, in many cantons, capital tax base or rate relief). Model both. |
Allocation matters: for multi-canton businesses, the equity base must be split between cantons using Swiss allocation keys. Geneva-situs real estate and permanent establishments often dominate the allocation result.
Rates, Minimum Tax & Typical Reliefs
Capital tax rate structure
Geneva levies a capital tax on taxable equity. The effective burden depends on the cantonal and communal components and can be influenced by: the company’s equity level, the presence of qualifying participations (holdings), and minimum tax rules for low-profit/loss situations.
Because Geneva rate components and minimum tax parameters are regularly updated (and can differ by commune), the most reliable approach is to:
- use the Rates page of this hub for the current year summary, and
- cross-check with the official Swiss tax calculator (AFC/ESTV) and Geneva’s tax administration guidance for the current tax period.
Practice note: in Geneva, modelling the minimum tax outcome is often as important as the headline per-mille rate—especially for holding-heavy or low-margin structures.
Minimum tax & relief themes
Geneva commonly applies minimum tax mechanics such that companies contribute a baseline tax amount even if profits are low or negative. In practice, this can make capital tax (or a minimum tax linked to capital) the binding constraint for certain profiles.
Relief themes frequently relevant in Geneva:
- Qualifying participations. Holding-heavy companies often rely on participation relief for profit tax and may benefit from capital tax relief mechanisms (rate/base/credit depending on Geneva rules).
- Group structures. Inter-company financing and asset allocation can change the Geneva-attributable equity base and minimum tax outcome.
- Post-STAF transitions. If legacy special regimes or step-ups are involved, transitional treatment can impact both capital and profit tax over multiple years.
If you need a defensible result, Geneva ruling practice is commonly used for complex holding, financing and migration scenarios.
Interaction with Profit Tax
Capital tax is coordinated with corporate income tax in Geneva. Key points:
- Same return, separate bases. Profit tax is levied on taxable income; capital tax is levied on equity. Both are handled within the same corporate tax filing cycle.
- Minimum tax can dominate. Loss-making or low-profit companies can still face meaningful tax due to minimum tax rules (often linked to capital/equity).
- Debt vs. equity trade-off. Increasing equity can reduce financing challenges but increases capital tax; high debt can reduce capital tax but increases thin-cap scrutiny and interest limitation risk.
- Holdings & participations. Participation relief affects profit tax; capital tax relief (where applicable) targets the equity base linked to participations. Optimisation usually requires combined modelling.
For profit tax, see Geneva corporate tax and the calculator.
Planning Points & Typical Cases
| Theme | Capital tax angle | Typical actions |
|---|---|---|
| Holding-heavy groups | Capital tax and minimum tax can become the binding burden even if profit tax is low due to participation relief. | Model minimum tax scenarios; document participation qualification; align equity allocation and substance in Geneva. |
| Financing structure | Equity increases capital tax; excessive shareholder debt can be reclassified as hidden equity (raising capital tax anyway). | Review thin-cap position; document arm’s-length debt terms; consider equity instruments consistent with substance. |
| Migrations & restructurings | Step-ups, hidden reserves and transitional treatments can impact equity and minimum tax for several years. | Prepare pro-forma balance sheets; map tax values vs book values; seek rulings where cross-border or multi-cantonal elements exist. |
| Real estate | Geneva-situs real estate can drive the equity allocation to Geneva and influence capital tax significantly. | Check allocation keys; consider property-company structuring consistent with business needs; manage valuation documentation. |
| IP & functions | IP-rich structures can raise equity; profit-tax relief instruments may help but capital tax still needs to be modelled (incl. minimum tax). | Maintain robust functional analysis; value IP carefully; coordinate profit and capital tax levers. |
Compliance Snapshot
Capital tax is assessed and collected together with corporate income tax for juristic persons. For procedural detail, see Forms & deadlines. Key points include:
| Area | Key points |
|---|---|
| Return | Annual corporate tax return includes both profit and capital tax schedules; Geneva practice relies on cantonal filing tools and required annexes for equity and participations. |
| Deadline | Filing deadlines generally follow Geneva practice (often tied to year-end with extensions possible). Equity base documentation should match the same tax period. |
| Documentation | Balance sheet; equity reconciliation; participation schedules; related-party financing analysis; allocation documentation for multi-cantonal businesses and permanent establishments. |
| Assessments & objections | Assessments typically cover both profit and capital tax. Objections should distinguish profit-tax base points from equity/rate/minimum-tax points. |
FAQs
What is taxed under Geneva capital tax?
Geneva capital tax is levied on a company’s equity attributable to Geneva: paid-in capital, open reserves, retained earnings and, where relevant, hidden equity (e.g. recharacterised shareholder financing). Multi-cantonal allocation can materially affect the Geneva base.
Does Geneva apply a minimum tax?
Yes—Geneva commonly applies minimum tax mechanics so that companies contribute a baseline amount even in low-profit or loss years. In many real-world cases, minimum tax (often linked to equity/capital) is the binding constraint.
How do participations affect capital tax in Geneva?
Qualifying participations typically reduce profit tax through participation relief. Depending on Geneva’s current rules, participations can also influence capital tax via relief mechanisms (rate/base/credit). For holding-heavy profiles, model profit tax and capital/minimum tax together.
How is the Geneva capital tax rate determined?
The effective burden depends on Geneva’s cantonal/communal components and is often impacted by minimum tax parameters and the equity profile. Use the hub Rates page and official calculators for the current-year figures.
Can capital tax be reduced through planning?
Within legal limits, yes. Typical levers include optimising equity vs. debt (while managing thin-cap risk), structuring holding participations with substance, and managing inter-cantonal allocation. Complex cases in Geneva are often confirmed via advance rulings.
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