Zug Capital Tax
Last updated: 15 Dec 2025
Zug Capital Tax — Equity Tax Rules
How capital tax works for companies in the Canton of Zug: who is subject to equity tax, how the taxable capital base is determined, Zug’s standard and reduced capital tax rates, how municipal multipliers translate statutory rates into effective burdens, and how capital tax interacts with corporate income tax (profit tax).
Scope & Taxpayers
- Resident companies. Capital tax applies to companies with statutory seat or effective place of management in Zug (AG, GmbH, cooperatives and other juristische Personen) on their equity allocable to the canton.
- Nonresident entities. Nonresident companies with a permanent establishment in Zug or Zug-situs real estate are subject to capital tax on the equity attributable to those Zug assets and operations.
- Tax period and valuation date. Capital tax is assessed annually and is based on taxable equity shown in the financial statements, adjusted for tax purposes (e.g., hidden equity where shareholder financing is excessive). Intercantonal allocation is crucial for multi-site businesses.
Tax Base: Equity & Hidden Equity
For Zug capital tax, the base is taxable equity (steuerbares Eigenkapital): paid-in capital and reserves (open), plus potential adjustments such as hidden equity and step-ups, subject to any reduced-rate classifications for certain asset categories.
| Component | Included? | Comment |
|---|---|---|
| Share / paid-in capital | Yes | Included for AG/GmbH based on registered paid-in capital. |
| Open reserves | Yes | Legal reserves, voluntary reserves and retained earnings form part of taxable equity. |
| Hidden reserves / step-ups | Yes, in principle | Where step-ups are recorded (migrations/reorganisations) or assets are carried below tax values, taxable equity can increase. |
| Hidden equity (recharacterised debt) | Yes, if triggered | Excess shareholder loans can be reclassified as hidden equity under Swiss thin-capitalisation practice, increasing taxable equity. |
| Participations / qualifying loans / qualifying patents | Yes, but at reduced rate | Zug applies a reduced capital tax rate to the equity attributable to qualifying participations, qualifying group loans and qualifying patents/patent-like rights. |
In practice, the “reduced rate” category is where Zug’s capital tax becomes especially attractive for holding, financing and IP-rich structures—but the classification and allocation must be supportable in the return.
Rates, Reduced Rate & Municipal Multipliers
Statutory rates (Zug)
Zug levies capital tax as a statutory “simple” rate on taxable equity, which is then combined with the applicable cantonal and communal multipliers. The key statutory rates are:
- Standard capital tax rate: 0.08‰ of taxable equity (0.008%).
- Reduced capital tax rate: 0.02‰ on equity attributable to qualifying participations, qualifying loans and qualifying patents/patent-like rights.
These reduced rates typically apply where the relevant assets meet the definitions and documentation requirements in Zug law and practice.
Effective burden (commune matters)
Zug’s effective payable capital tax depends on where the company is taxed within the canton (commune) because communes apply their own multipliers. For reliable year- and commune-specific outputs:
- Zug tax calculator (juristic persons)
- Rates page of this hub
Switzerland levies no federal capital tax. Capital tax is cantonal/communal (and can differ materially by commune).
Interaction with Profit Tax
Capital tax and corporate income tax (profit tax) are assessed together for juristic persons, but they operate on separate bases: profit tax on taxable net profit and capital tax on taxable equity (with reduced-rate categories for certain assets).
- Single filing. The annual corporate tax return includes both profit and equity schedules.
- Asset mix matters. Holdings, group loans and qualifying patents can lower the capital tax burden via the reduced rate, while participation relief affects profit tax on qualifying dividend/gain income.
- Financing trade-off. More equity can reduce thin-cap exposure for profit tax, but increases capital tax; shareholder debt can be reclassified as hidden equity if excessive.
- Intercantonal allocation. If you have PEs or real estate outside Zug, equity allocation impacts both profit and capital tax calculations.
For the profit tax side, see the Zug corporate income tax page and the calculator.
Planning Points & Typical Cases
| Theme | Capital tax angle (Zug) | Typical actions |
|---|---|---|
| Holdings / participations | Equity attributable to qualifying participations can be taxed at the reduced 0.02‰ rate, lowering the equity-side burden. | Maintain participation documentation; reconcile equity allocation to reduced-rate assets; model profit + capital together. |
| Group financing & treasury | Qualifying loans can attract the reduced capital tax rate, but require robust classification and transfer-pricing support. | Document loan books and terms; align transfer pricing; consider rulings for treasury setups. |
| IP structures | Qualifying patents/patent-like rights can attract the reduced capital tax rate; profit-tax tools (e.g., patent box) may also apply depending on circumstances. | Map IP rights and functions; support valuations; coordinate profit-tax and capital-tax optimisation. |
| Equity vs debt | More equity increases the capital tax base; too much shareholder debt can be recharacterised as hidden equity (increasing the base anyway). | Thin-cap review; arm’s-length interest and security; document governance and financing rationale. |
| Commune choice | Municipal multipliers can materially affect the effective burden even with low statutory rates. | Model commune alternatives using the official calculator; ensure substance/location requirements are met. |
Compliance Snapshot
Capital tax is assessed and collected together with corporate income tax for juristic persons. For procedural detail, see Forms & deadlines.
| Area | Key points |
|---|---|
| Return | Annual corporate tax return includes both profit and capital schedules, plus any schedules required for reduced-rate asset categories. |
| Deadline | Typically aligned with the corporate filing deadline (often around six months after year-end; extensions generally available). |
| Documentation | Financial statements; equity reconciliation; participation list; loan book (if applicable); IP/patent documentation (if applicable); allocation support for multi-canton cases. |
| Assessments & objections | Assessment covers both profit and capital taxes; objections should clearly separate profit issues from equity/rate-classification/allocation issues. |
FAQs
What is the standard capital tax rate in Zug?
Zug’s standard statutory capital tax rate is 0.08‰ of taxable equity. The effective burden depends on cantonal and communal multipliers.
When does the reduced 0.02‰ rate apply?
The reduced rate applies to equity attributable to qualifying participations, qualifying loans and qualifying patents/patent-like rights, subject to Zug’s legal definitions and practice. Classification and allocation should be documented in the tax return schedules.
What counts as taxable equity for Zug capital tax?
Taxable equity generally includes paid-in capital and open reserves (retained earnings and other reserves) and can be increased by tax adjustments such as hidden equity if shareholder financing is excessive under Swiss thin-capitalisation practice.
How do I get the effective capital tax amount for my commune?
Use the official Zug corporate tax calculator: select the tax year and commune, then input taxable equity (and profit if you want the full combined picture). This will reflect the current multipliers for that location.
Can capital tax be reduced legally?
Often, yes—by optimising equity vs. debt (within thin-cap/arm’s-length limits), using qualifying participations/loans/patents that attract the reduced rate, and modelling commune choice while meeting substance requirements.
Get Zug capital & corporate tax help (Sesch TaxRep GmbH) Zug cantonal tax service
Last updated: 15 Dec 2025
Zug Capital Tax — Equity Tax Rules
How capital tax works for companies in the Canton of Zug: who is subject to equity tax, how the taxable capital base is determined, Zug’s standard and reduced capital tax rates, how municipal multipliers translate statutory rates into effective burdens, and how capital tax interacts with corporate income tax (profit tax).
Scope & Taxpayers
- Resident companies. Capital tax applies to companies with statutory seat or effective place of management in Zug (AG, GmbH, cooperatives and other juristische Personen) on their equity allocable to the canton.
- Nonresident entities. Nonresident companies with a permanent establishment in Zug or Zug-situs real estate are subject to capital tax on the equity attributable to those Zug assets and operations.
- Tax period and valuation date. Capital tax is assessed annually and is based on taxable equity shown in the financial statements, adjusted for tax purposes (e.g., hidden equity where shareholder financing is excessive). Intercantonal allocation is crucial for multi-site businesses.
Tax Base: Equity & Hidden Equity
For Zug capital tax, the base is taxable equity (steuerbares Eigenkapital): paid-in capital and reserves (open), plus potential adjustments such as hidden equity and step-ups, subject to any reduced-rate classifications for certain asset categories.
| Component | Included? | Comment |
|---|---|---|
| Share / paid-in capital | Yes | Included for AG/GmbH based on registered paid-in capital. |
| Open reserves | Yes | Legal reserves, voluntary reserves and retained earnings form part of taxable equity. |
| Hidden reserves / step-ups | Yes, in principle | Where step-ups are recorded (migrations/reorganisations) or assets are carried below tax values, taxable equity can increase. |
| Hidden equity (recharacterised debt) | Yes, if triggered | Excess shareholder loans can be reclassified as hidden equity under Swiss thin-capitalisation practice, increasing taxable equity. |
| Participations / qualifying loans / qualifying patents | Yes, but at reduced rate | Zug applies a reduced capital tax rate to the equity attributable to qualifying participations, qualifying group loans and qualifying patents/patent-like rights. |
In practice, the “reduced rate” category is where Zug’s capital tax becomes especially attractive for holding, financing and IP-rich structures—but the classification and allocation must be supportable in the return.
Rates, Reduced Rate & Municipal Multipliers
Statutory rates (Zug)
Zug levies capital tax as a statutory “simple” rate on taxable equity, which is then combined with the applicable cantonal and communal multipliers. The key statutory rates are:
- Standard capital tax rate: 0.08‰ of taxable equity (0.008%).
- Reduced capital tax rate: 0.02‰ on equity attributable to qualifying participations, qualifying loans and qualifying patents/patent-like rights.
These reduced rates typically apply where the relevant assets meet the definitions and documentation requirements in Zug law and practice.
Effective burden (commune matters)
Zug’s effective payable capital tax depends on where the company is taxed within the canton (commune) because communes apply their own multipliers. For reliable year- and commune-specific outputs:
- Zug tax calculator (juristic persons)
- Rates page of this hub
Switzerland levies no federal capital tax. Capital tax is cantonal/communal (and can differ materially by commune).
Interaction with Profit Tax
Capital tax and corporate income tax (profit tax) are assessed together for juristic persons, but they operate on separate bases: profit tax on taxable net profit and capital tax on taxable equity (with reduced-rate categories for certain assets).
- Single filing. The annual corporate tax return includes both profit and equity schedules.
- Asset mix matters. Holdings, group loans and qualifying patents can lower the capital tax burden via the reduced rate, while participation relief affects profit tax on qualifying dividend/gain income.
- Financing trade-off. More equity can reduce thin-cap exposure for profit tax, but increases capital tax; shareholder debt can be reclassified as hidden equity if excessive.
- Intercantonal allocation. If you have PEs or real estate outside Zug, equity allocation impacts both profit and capital tax calculations.
For the profit tax side, see the Zug corporate income tax page and the calculator.
Planning Points & Typical Cases
| Theme | Capital tax angle (Zug) | Typical actions |
|---|---|---|
| Holdings / participations | Equity attributable to qualifying participations can be taxed at the reduced 0.02‰ rate, lowering the equity-side burden. | Maintain participation documentation; reconcile equity allocation to reduced-rate assets; model profit + capital together. |
| Group financing & treasury | Qualifying loans can attract the reduced capital tax rate, but require robust classification and transfer-pricing support. | Document loan books and terms; align transfer pricing; consider rulings for treasury setups. |
| IP structures | Qualifying patents/patent-like rights can attract the reduced capital tax rate; profit-tax tools (e.g., patent box) may also apply depending on circumstances. | Map IP rights and functions; support valuations; coordinate profit-tax and capital-tax optimisation. |
| Equity vs debt | More equity increases the capital tax base; too much shareholder debt can be recharacterised as hidden equity (increasing the base anyway). | Thin-cap review; arm’s-length interest and security; document governance and financing rationale. |
| Commune choice | Municipal multipliers can materially affect the effective burden even with low statutory rates. | Model commune alternatives using the official calculator; ensure substance/location requirements are met. |
Compliance Snapshot
Capital tax is assessed and collected together with corporate income tax for juristic persons. For procedural detail, see Forms & deadlines.
| Area | Key points |
|---|---|
| Return | Annual corporate tax return includes both profit and capital schedules, plus any schedules required for reduced-rate asset categories. |
| Deadline | Typically aligned with the corporate filing deadline (often around six months after year-end; extensions generally available). |
| Documentation | Financial statements; equity reconciliation; participation list; loan book (if applicable); IP/patent documentation (if applicable); allocation support for multi-canton cases. |
| Assessments & objections | Assessment covers both profit and capital taxes; objections should clearly separate profit issues from equity/rate-classification/allocation issues. |
FAQs
What is the standard capital tax rate in Zug?
Zug’s standard statutory capital tax rate is 0.08‰ of taxable equity. The effective burden depends on cantonal and communal multipliers.
When does the reduced 0.02‰ rate apply?
The reduced rate applies to equity attributable to qualifying participations, qualifying loans and qualifying patents/patent-like rights, subject to Zug’s legal definitions and practice. Classification and allocation should be documented in the tax return schedules.
What counts as taxable equity for Zug capital tax?
Taxable equity generally includes paid-in capital and open reserves (retained earnings and other reserves) and can be increased by tax adjustments such as hidden equity if shareholder financing is excessive under Swiss thin-capitalisation practice.
How do I get the effective capital tax amount for my commune?
Use the official Zug corporate tax calculator: select the tax year and commune, then input taxable equity (and profit if you want the full combined picture). This will reflect the current multipliers for that location.
Can capital tax be reduced legally?
Often, yes—by optimising equity vs. debt (within thin-cap/arm’s-length limits), using qualifying participations/loans/patents that attract the reduced rate, and modelling commune choice while meeting substance requirements.
Get Zug capital & corporate tax help (Sesch TaxRep GmbH) Zug cantonal tax service