Valais Capital Tax
Last updated: 14 Dec 2025
Valais Capital Tax — Equity Tax Rules
How capital tax (impôt sur le capital) works for companies in the Canton of Valais (VS): who is subject to equity tax, how the taxable equity base is determined (including hidden equity), how cantonal and communal multipliers create the effective burden, when capital tax becomes relevant for low-profit/loss situations, and how capital tax interacts with corporate income tax.
Scope & Taxpayers
- Resident companies. Capital tax applies to companies with statutory seat or effective place of management in Valais (AG/SA, GmbH/Sàrl, cooperatives and other personnes morales), on equity allocable to Valais.
- Nonresident entities. Nonresident companies are subject to Valais capital tax to the extent they maintain a permanent establishment in Valais or own Valais-situs real estate; the taxable base is the equity attributable to those Valais factors.
- Tax period and valuation date. Capital tax is assessed annually with the corporate return. The balance sheet is the starting point, with adjustments possible for tax values and hidden equity (e.g. shareholder debt recharacterised under Swiss thin-cap practice).
- Legal form. This page focuses on capital companies and cooperatives. Foundations, associations and charitable entities may be exempt or subject to separate rules.
Tax Base: Equity & Hidden Equity
For Valais capital tax, the taxable base is equity attributable to the canton: share capital (paid-in capital), open reserves, retained earnings and (where relevant) taxed hidden reserves and hidden equity.
| Component | Included? | Comment |
|---|---|---|
| Share/paid-in capital | Yes | Included for AG/SA and GmbH/Sàrl based on registered capital and paid-in elements. |
| Open reserves | Yes | Legal reserves, voluntary reserves and retained earnings form part of taxable equity. |
| Hidden reserves (incl. goodwill) | Yes, in principle | Adjustments can matter in migrations/restructurings, related-party transactions, or where book values diverge materially from tax values. |
| Revaluation / step-up reserves | Yes | Once recorded in equity, revaluations/step-ups increase the capital tax base (subject to any transitional treatment). |
| Shareholder loans / hybrids | Partially | Excessive shareholder financing can be treated as hidden equity, increasing taxable capital and potentially affecting interest deductibility. |
| Participations & IP | Yes, but relief may apply | Participation relief is primarily a profit-tax concept, but participation-heavy equity profiles often require capital tax modelling and may interact with capital-tax relief concepts depending on Valais rules. |
Multi-canton note: the equity base must be allocated between cantons using Swiss allocation principles. Valais real estate and permanent establishments can materially affect the Valais share.
Rates, Multipliers & Minimum-Burden Effects
How the effective Valais capital tax is built
Valais commonly builds cantonal and communal taxes using a base (simple) capital tax applied to taxable equity, then multiplied by:
- a cantonal coefficient, and
- a communal coefficient (varies by municipality).
This means the effective burden can differ meaningfully depending on the commune where the company is taxed in Valais. For current parameters and commune comparisons, use the hub Rates page and official Valais coefficient tables.
When capital tax becomes relevant
In profitable years, profit tax often dominates the overall cantonal/communal burden. Capital tax becomes more visible for:
- Start-ups and scale-ups with high equity but low current taxable profit,
- Holdings with participation relief reducing profit tax,
- Asset-rich companies (e.g. real estate, large securities portfolios), and
- Low-margin operating entities in cyclical industries.
Depending on the detailed Valais rules for the year (and the applicable coefficients), a minimum-burden effect can occur, so modelling should always include the “low-profit” scenario.
Interaction with Profit Tax
Capital tax and corporate income tax are coordinated in Valais. Key points:
- Same return, separate bases. Profit tax is levied on taxable income; capital tax is levied on taxable equity.
- Multipliers matter for both. Cantonal/communal coefficients affect the effective burden and can differ by commune.
- Debt vs. equity trade-off. More equity increases capital tax but reduces thin-cap risk; excessive shareholder loans can be reclassified as hidden equity (raising taxable capital anyway).
- Participation-heavy profiles. Participation relief reduces profit tax; capital tax can still be meaningful for holding-heavy balance sheets.
For profit tax, see the Valais corporate tax page and the calculator.
Planning Points & Typical Cases
| Theme | Capital tax angle | Typical actions |
|---|---|---|
| Financing structure | Equity increases capital tax; shareholder debt can be challenged and treated as hidden equity. | Review financing; document arm’s-length terms; run thin-cap checks; coordinate interest deductibility and equity exposure. |
| Holdings & participations | Holdings can face meaningful capital tax even where profit tax is low due to participation relief. | Model capital vs profit tax together; document participation qualification; consider ruling strategy for complex holdings. |
| Real estate & allocation | Valais-situs real estate can drive equity allocation into Valais and increase the capital tax base. | Document valuations and allocation keys; consider asset ring-fencing consistent with business needs; manage financing and cash flows. |
| Restructurings & migrations | Seat transfers and restructurings can shift allocation keys and trigger equity/tax-value adjustments. | Prepare pro-forma balance sheets; map tax values vs book values; seek advance rulings where material. |
| Low-profit years | Capital tax can become binding in low-profit or loss years, especially for equity-heavy companies. | Model “downside” years; consider legal rebalancing of equity/debt; ensure substance and documentation support the structure. |
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, plus equity reconciliation and allocation schedules where needed. |
| Deadline | Deadlines follow Valais practice (often tied to year-end with extensions possible). Equity documentation should align with the same period. |
| Documentation | Balance sheet; equity reconciliation; participation schedules; related-party financing/thin-cap analysis; allocation keys for multi-canton/foreign elements; real estate documentation where relevant. |
| Assessment & objections | Assessments commonly cover profit and capital tax together. Objections should separate profit-tax base items from equity/allocation issues. |
FAQs
What is taxed under Valais capital tax?
Valais capital tax is levied on the company’s equity attributable to Valais: paid-in capital, open reserves, retained earnings and, where relevant, hidden equity. Allocation is critical for multi-canton businesses and for companies holding Valais-situs real estate.
How is the Valais capital tax rate determined?
Valais commonly applies a base/simple capital tax and then multiplies it by cantonal and communal coefficients. Because communal coefficients vary, the effective burden can differ materially across Valais municipalities.
Does Valais have a minimum capital tax?
Depending on the year and the applicable cantonal/communal parameters, low-profit or loss-making companies can face a minimum-burden effect where capital tax becomes the binding cost. This is especially relevant for start-ups, holdings and asset-rich vehicles.
How does capital tax interact with corporate income tax in Valais?
They are separate taxes with different bases (profit vs. equity) but are handled together in the annual filing workflow and are both influenced by coefficients. Participation relief can reduce profit tax while capital tax remains meaningful for equity-heavy structures.
Can capital tax be reduced through planning?
Within legal limits, yes. Typical levers include optimising equity vs. debt (while managing thin-cap recharacterisation), managing asset allocation and real estate structure, and using rulings for complex holding, migration or financing cases.
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