How high is the corporate tax in Switzerland?

The effective profit tax burden ranges between 11% and 21% depending on location. The federal tax is a flat 8.5%. The cantonal and municipal burden varies widely -- Zug and Nidwalden are the cheapest, Bern and Zurich the most expensive. The corporate location comparison shows the differences.

What is the participation deduction?

If a corporation holds at least 10% of another company or the participation value is at least CHF 1 million, the profit tax is reduced in proportion to the participation income relative to total profit. This prevents economic double taxation for groups and holding companies.

Is a location change worthwhile for my company?

With a net profit of CHF 500,000, the difference between the cheapest and most expensive canton can exceed CHF 45,000 per year. Compare specific locations with the corporate location comparison.

How are AG and GmbH taxed?

AG and GmbH are taxed identically. Both are subject to profit tax on net profit and capital tax on equity. The legal form has no impact on the amount of corporate tax.

Is church tax relevant for companies?

In some cantons (e.g. Zurich, Bern, Basel-Stadt), legal entities are also subject to church tax. The surcharge ranges from 5-10% of the cantonal profit tax depending on the canton and denomination. An opt-out is possible for legal entities in some cantons.

Corporate Tax Calculator

Calculate profit tax and capital tax for legal entities in Switzerland.

The corporate tax calculator computes the profit tax and capital tax for corporations (AG, GmbH) in every Swiss municipality. The effective tax burden ranges between 11% and 21% depending on location -- this calculator shows the exact burden including federal, cantonal, and municipal tax.

How high is the profit tax in Switzerland?

The direct federal tax on net profit is 8.5% (Art. 68 DBG). In addition comes the cantonal and municipal profit tax, which varies widely. Since the TRAF reform, many cantons have reduced their rates. The cheapest cantons (Zug, Nidwalden, Appenzell I.Rh.) achieve effective total burdens below 12%. Zurich is at around 19%, Bern at approx. 21%. The direct comparison of multiple locations is provided by the corporate location comparison.

Capital tax and TRAF instruments

In addition to profit tax, a capital tax is levied on equity (cantonal/municipal, typically 0.01-0.5%). Important planning instruments include: - Participation deduction (Art. 69-70 DBG): Reduces profit tax for participation income from holdings of at least 10% or CHF 1 million participation value - Patent box: Reduction of taxation on income from patents and comparable rights - R&D super deduction: Up to 150% deduction for research and development expenditure These TRAF instruments are available in all cantons but are implemented with varying generosity.

Distribute dividends or retain profits?

Retained profits are taxed once (profit tax) but increase the taxable equity (capital tax). Distributed dividends are additionally subject to income tax for the shareholder (with partial taxation). The optimal mix of salary and dividend is calculated by the dividend-vs-salary calculator.

Frequently Asked Questions

How high is the corporate tax in Switzerland?+
What is the participation deduction?+
Is a location change worthwhile for my company?+
How are AG and GmbH taxed?+
Is church tax relevant for companies?+

How high is the profit tax in Switzerland?

Capital tax and TRAF instruments