Taxation

The corporate tax rate is collected in Switzerland from companies, based on their net income obtained from business activities during a fiscal year. 

Each state has the sovereign right to levy taxes, which means that it has to deal with certain tax issues that concern not only its own citizens, but also citizens that are non-residents who occasionally or temporarily earn income in the respective state.

In order to understand the Swiss tax system, it is important to understand that due to its federal structure (26 cantons and approximately 2,300 municipalities) there is no uniform taxation system. Depending on the tax type, some are levied exclusively at a federal level such Value Added Tax (VAT), and some at both levels: federal and cantonal such as income tax.
Here is a list with 10 Swiss cantons with the lowest taxes in Switzerland and also around the world.

Switzerland has become a preferred destination for investors due to its taxation system, geographic and political position, low inflation, low unemployment rate as well as its competitive business environment. 

Taxes in Switzerland are levied at federal, cantonal and local level. Dividends and interests are a subject of the withholding tax, at a rate of 35%, however the withholding tax can be deducted in full, under certain conditions. 

The cost of living in Switzerland is among the highest in the world, with the main cities Zurich and Geneva being named in the top 15 most expensive cities in the world in a 2019 study. On the other hand, Swiss salaries and the living standards are also among the highest in the world, which is the main reason why you should consider Switzerland a perfect location for work and living a quality life.

The Corporate Tax Reform III has been approved by the Swiss Parliament. This tax reform was created in order to preserve Switzerland’s attractiveness as a location for multinational companies that want to take advantage of a more relaxed taxation. 

Switzerland is offering one of the most competitive business environments, not only on European level, but also globally. This is a consequence of the business – friendly strategy adopted by the Swiss government. 

The United States of America and the Swiss Confederation have signed a convention regarding the avoidance of double taxation concerning income taxes, which became effective on January 1 1998. 

In June 2016, the Swiss parliament passed the final corporate tax reform package meant to strengthen Switzerland as a competitive business location for foreign companies or entrepreneurs. The tax reform plan (CTR III) includes several tax reform measures related to the federal and cantonal tax laws.