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.

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Value added tax:

Value added tax is a federal tax. The FTA(Swiss Federal Tax Administration) is responsible for collecting it.
VAT is generally mandatory for sales of over CHF 100,000 per year; below this amount, registration is voluntary. The company must register itself as a taxable person with the Federal Tax Administration.

Normally, the tax rate is 8.1%.
It is possible to invoice according to agreed or received remuneration.

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Taxes on profits:

Direct federal tax:
Taxation by the federal government is proportional and amounts to 8.5% of the taxable profit.
Cantonal and municipal tax:
The profit tax levied by the cantons and municipalities varies depending on the canton and municipality.
The canton of Zug is one of the most tax-efficient cantons in Switzerland.

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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.

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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.