In business world and not only, tax is one of the most important cost factors that needs to receive proper consideration, even before the commencement of any type of business. In many situations, tax planning can significantly reduce the total tax bill, especially when it comes to cross border businesses, or for group structures that operate in various jurisdictions.
The Swiss tax system is characterized by various levels of direct taxation: direct federal tax, cantonal and municipal taxes. Furthermore, the tax legislations in the individual cantons are often very different from each other. Therefore, in some cases it is advisable to consult relevant double taxation treaties, with the purpose of avoiding double tax burdens. Switzerland maintains treaties of this kind with most industrialized nations.
Depending on the activity of the corporation, the tax rate varies. There are significant differences between operating companies, holding companies, domicile companies and mixed companies.
Ordinary taxation is payable on the taxable net profit and the paid up share of foundation capital, as well as on disclosed and the hidden reserves. In some cantons, privileged taxation is used for certain corporations, depending on their activity. In some cases, especially for holding companies, it is possible to claim a tax reduction. Therefore, it’s important to develop a tax planning department that is able to comply with the tax regulations depending on the company type, activity type and tax regulations enforced in each Swiss canton.
Depending on the framework of the business activity, supplying goods and services on Swiss territory gives rise to the value – added tax (VAT) which is levied on gross sales. The normal rate is low in comparison with other European countries, but for certain goods and services, the rate is even lower, up to 2.5%.
Our tax planning services include:
- Creation of tax returns
- Tax optimization, planning and advice
- Representation before designated tax authorities
- Accounting and consulting for the Swiss and EU VAT
- Accounting and consulting for the Swiss and EU withholding tax