Taxes in Switzerland

More about taxes

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In order to understand the tax system in Switzerland, it is important to know that in Switzerland both the federal government and the cantons and often also the municipalities are allowed to levy taxes independently. The amount of taxes differs from canton to canton and from municipality to municipality. As a result, there is healthy tax competition in Switzerland, which ultimately benefits businesses and citizens.

Value added tax:

The value added tax is a federal tax. The FTA(Swiss Federal Tax Administration) is responsible for levying it.
If the turnover exceeds CHF 100,000 per year, there is usually an obligation to register for VAT; below that, registration is voluntary. The company must register itself as a taxpayer with the Federal Tax Administration.Normally, the tax rate is 7.7%.
It can be settled according to agreed or collected charges.

Taxes on profits:

Direct federal tax:
The taxation by the federal government is proportional and effectively amounts to X%.
Cantonal and communal tax:
The profit tax levied by the cantons and communes varies from canton to canton and commune to commune and depends on the type of company (holding company, domiciliary company, mixed company, ordinary company). In the most favorable case it can be 0%, in the most expensive case more than 30%.
The canton of Zug is one of the most tax-favorable cantons in Switzerland.

Capital tax:

Capital tax is levied by the canton and the municipality on the so-called taxable equity capital. The tax rate is proportional and usually ranges between 0.3% and 1%, depending on the canton or municipality.

Withholding tax:

The withholding tax is 35%. It is paid on investment income such as interest, dividends and lottery winnings directly by the bank, corporation or lottery company and can be reclaimed by Swiss residents with their tax return. The amount is deducted from the taxes payable.

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