Glarus Corporate Income Tax
Last updated: 13 Dec 2025
Glarus Corporate Income Tax — Profit Tax Rules
How corporate income tax works in the Canton of Glarus: who is subject to profit tax, how the tax base is determined from accounting profit, how cantonal, communal and federal components interact, and what to know about participation relief, Glarus’ STAF measures and loss carryforwards.
Scope & Taxpayers
- Resident companies. Companies with statutory seat or effective place of management in Glarus 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.:contentReference[oaicite:0]{index=0}
- Nonresident entities. Nonresident companies are limited tax liable in Glarus if they have local business operations, a permanent establishment, or Glarus–situs real estate. Only the profits attributable to the Glarus nexus are taxed.:contentReference[oaicite:1]{index=1}
- Juristic persons only. The corporate income tax described here applies to juristische Personen (AG, GmbH, cooperative, 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 Glarus tax office.:contentReference[oaicite:2]{index=2}
Tax Base: From Accounting Profit to Taxable Profit
Glarus corporate income tax is levied on the company’s taxable profit, determined by starting from statutory financial statements (usually Swiss GAAP / OR, sometimes Swiss GAAP FER or IFRS for groups) and then making tax adjustments.:contentReference[oaicite:3]{index=3}
| 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; provisions and value adjustments that are not commercially justified. |
| 3. Deductions | Items that are tax deductible but not expensed, or expensed differently, are deducted. | Tax-allowed depreciation exceeding accounting depreciation (within limits); specific provisions; participation relief; patent box adjustments where applicable. |
| 4. Allocation & exemptions | Profits allocable to other cantons or foreign permanent establishments are exempt in Glarus 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 Glarus tax book and cantonal practice notes provide detailed guidance on depreciation, provisions, hidden equity, participation relief and other adjustments relevant for the tax base. In practice, a clear reconciliation from accounting profit to taxable profit is expected as part of the Glarus corporate tax return.
Rates & Effective Burden
Cantonal & communal profit tax
With the STAF reform, Glarus significantly reduced its ordinary profit tax rate for companies. The simple cantonal profit tax rate on net profit was cut from 8.0% to 4.5% as of 1 January 2020.:contentReference[oaicite:4]{index=4}
Based on this reduced rate and including direct federal corporate income tax, the combined effective corporate income tax burden in Glarus is quoted at around 12.4% of profit before tax.:contentReference[oaicite:5]{index=5} Comparative tables for 2023 show indicative effective combined rates (cantonal, communal and federal, before church tax) of about:
- 12.3% in the municipality of Glarus; and
- 12.6% in Glarus Süd.:contentReference[oaicite:6]{index=6}
The differences between municipalities are relatively modest; the canton as a whole positions itself as a competitive, mid-teens-minus corporate tax location.
For up-to-date Glarus profit tax burdens and details of the tariff, see the Rates page and the official Glarus company tax calculator .:contentReference[oaicite:7]{index=7}
Federal corporate income tax
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 about 7.8% on profit before tax.:contentReference[oaicite:8]{index=8}
The combined effective corporate income tax rate for a Glarus company is therefore the sum of:
- Cantonal/communal profit tax at the simple 4.5% rate (plus any municipal factor); and
- Direct federal corporate income tax.
The Glarus tax calculator on this hub allows you to model combined cantonal, communal and federal profit tax for a given level of taxable profit and municipality.
Participation Relief & STAF Measures
Glarus follows federal rules for participation relief and has implemented STAF (Swiss corporate tax reform and AHV financing) with a moderate patent box but no R&D super-deduction, and a deliberately low overall relief cap.:contentReference[oaicite:9]{index=9}
| Mechanism | Overview | Typical planning aspects |
|---|---|---|
| Participation relief | Qualifying dividends and capital gains from shareholdings in subsidiaries are effectively subject to reduced taxation via a deduction calculated on the basis of net participation income relative to total profit (federal and Glarus rules). | 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, treaty relief and Glarus allocation rules. |
| Patent box | Income from qualifying intellectual property (patents and comparable rights) can benefit from a reduced Glarus profit tax base under patent box rules, subject to OECD nexus requirements and tracking of R&D expenditure. In contrast to some other cantons, Glarus grants a relatively modest relief of 10% on qualifying net patent income, i.e. 90% of such income remains taxable.:contentReference[oaicite:10]{index=10} | Segregation of IP income and expenses; documenting qualifying patents and related R&D; coordinating the modest Glarus patent box with group transfer pricing and global minimum tax (Pillar 2). |
| R&D super-deduction | Swiss law allows cantons to grant an additional deduction of up to 50% on qualifying R&D expenditure. Glarus has opted not to introduce any R&D super-deduction; the relevant provision was explicitly not implemented (F&E-Zusatzabzug wird nicht eingeführt).:contentReference[oaicite:11]{index=11} | R&D costs are deductible under ordinary rules. Planning focuses on where R&D functions sit within the group and how they drive patent box-eligible income, rather than on a separate super-deduction. |
| Notional interest deduction (NID) | Glarus has not implemented a cantonal notional interest deduction on equity (Eigenfinanzierungsabzug).:contentReference[oaicite:12]{index=12} | Financing optimisation focuses on traditional debt/equity structuring and thin-capitalisation practice rather than NID planning. |
| Relief cap | Glarus has introduced a relatively strict relief cap of 10%: at least 90% of the taxable result (before loss set-off and before special reliefs) must remain subject to ordinary taxation.:contentReference[oaicite:13]{index=13} | Overall planning in Glarus is driven more by the low headline profit tax rate and only to a limited extent by special regimes; extensive “box” planning is less impactful than in cantons with a 70% relief cap. |
| Step-up for former status companies | On transition from a former special status (holding, domicile or mixed company) to ordinary taxation, hidden reserves existing at the time of transition can be taxed separately at a simple rate of 1.5% (effective burden around 1.86%) upon realisation within 5 years.:contentReference[oaicite:14]{index=14} | Planning of realisation timing for hidden reserves; interaction with OECD Pillar 2 rules and foreign CFC regimes; coordinating Glarus step-up with group-wide restructurings. |
Because the Glarus relief cap is only 10%, the emphasis is on a low ordinary profit tax rate rather than extensive use of special regimes. For material structures and conversions from former status companies, advance tax rulings are common.
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 Glarus, within the standard Swiss framework. Loss carryback is not available.:contentReference[oaicite:15]{index=15}
- Group situation. Switzerland has no fiscal unity or tax consolidation for ordinary corporate income tax. Each Glarus legal entity files its own return; group effects are managed via financing, transfer pricing, participation relief and (where relevant) the patent box.
- 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 Glarus practice and federal jurisprudence.
- Foreign permanent establishments. Under many treaties, profits attributable to foreign permanent establishments are exempt in Switzerland with progression. Accurate attribution of profits and capital is essential to support the exemption at Glarus and federal level.:contentReference[oaicite:16]{index=16}
- 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.). Rulings are frequently used to secure treatment for Glarus and federal purposes, especially where several cantons or countries are involved.
Interaction with Capital Tax
Corporate income tax and capital tax are both relevant for companies in Glarus. Capital tax rates are moderate in a Swiss comparison, but higher than in some neighbouring low-tax cantons.
- Glarus levies a capital tax on equity at a rate of around 2–2.5‰ of taxable equity (approximately 0.2–0.25%), with comparative tables for 2022 showing about 2.46‰ in the municipality of Glarus and around 2.62‰ in Glarus Süd.:contentReference[oaicite:17]{index=17}
- There is no specific crediting of profit tax against capital tax; both taxes are levied separately. However, the Glarus capital tax base is reduced in proportion to qualifying participations, patent box-eligible IP rights and certain loans to group companies, which can substantially lower the effective capital tax burden for holding and treasury structures.:contentReference[oaicite:18]{index=18}
- Higher equity increases capital tax, but may reduce thin-cap risks and support participation and IP structures that benefit from the patent box and participation relief.
- For details on Glarus capital tax, base reductions and examples of combined profit and capital tax burdens, see the Glarus capital tax page and the combined tax calculator.
Compliance Snapshot
This guide focuses on the substantive rules for corporate income tax in Glarus. 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 using the electronic tools and forms provided by the Glarus tax administration. Profit tax and capital tax are assessed together. Electronic filing is standard; signed confirmations may still be required. |
| Deadline | Ordinarily around six months after year-end; extensions are commonly available on request (via Glarus’ online or written extension procedure; beyond that by special request or via advisers). |
| Documentation | Signed financial statements; profit-to-tax reconciliation; schedules for participation relief and patent box; transfer pricing documentation where relevant; intercantonal and international allocation workings. |
| Assessments & objections | Combined assessments for cantonal, communal and federal tax; objection rights and deadlines set out in the assessment notice. For complex cases, structured responses and, where appropriate, follow-up discussions with the Glarus tax administration are common. |
FAQs
How high is the corporate income tax rate in Glarus?
The simple cantonal profit tax rate in Glarus is 4.5% of net profit. Including direct federal corporate income tax at 8.5% of profit after tax, the combined effective burden (cantonal/communal plus federal, before church tax) is around 12.4% for typical companies. Comparative tables show effective combined rates of about 12.3% in Glarus and 12.6% in Glarus Süd, with only modest municipal variation.:contentReference[oaicite:19]{index=19}
What STAF instruments does Glarus offer for companies?
Glarus has implemented a patent box with a relatively modest 10% relief on qualifying net patent income, alongside the standard participation relief. There is no R&D super-deduction and no notional interest deduction on equity. In addition, Glarus applies a relief cap of 10%, ensuring that at least 90% of the underlying profit remains taxable at ordinary rates.:contentReference[oaicite:20]{index=20}
How does capital tax work for companies in Glarus?
Glarus levies capital tax at around 2–2.5‰ of taxable equity (approximately 0.2–0.25%), with comparative data showing about 2.46‰ in Glarus and 2.62‰ in Glarus Süd. There is no formal crediting of profit tax against capital tax, but the capital tax base is reduced for qualifying participations, patent box-eligible IP and certain group loans, which can substantially reduce the effective capital tax burden for holding and financing structures.:contentReference[oaicite:21]{index=21}
Are dividends from subsidiaries fully taxed in Glarus?
No. Qualifying participations benefit from participation relief at federal and cantonal level. 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 Glarus and federal tax on qualifying dividends can be reduced significantly, often to a low single-digit effective rate.:contentReference[oaicite:22]{index=22}
How are losses treated for Glarus 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 Swiss rules may limit the use of losses; advance tax rulings are often used where material loss carryforwards are involved and Glarus is an important canton in the group structure.:contentReference[oaicite:23]{index=23}
Can I get a ruling on a planned structure or transaction in Glarus?
Yes. Glarus, like other Swiss cantons, offers advance tax rulings. These are commonly used for holding and financing structures, IP arrangements (including the patent box), reorganisations, relocations and transitions from former special status to ordinary taxation (including step-up solutions). 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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