Taxation

The Swiss VAT system follows the European VAT Directive. Nevertheless, there are some important differences that need to be addressed, especially when it comes to foreign suppliers of goods and services

A management company is best suited to meet the needs of international groups or corporations. The management company operates mainly outside Switzerland, although it may receive part of the income from Switzerland.

Mixed companies are corporations that have most of their business activity abroad and any business activity conducted in Switzerland is considered only of secondary nature. Both Swiss and foreign shareholders may have a dominant influence on a mixed company, which means that foreign citizens are allowed to open mixed companies in Switzerland.

The Swiss federal Council and the Government of the United Arab Emirates decided to conclude a Convention in regard to the avoidance of double taxation with respect to taxes on income. The UAE is one of Switzerland’s most important economic partners in the Middle East, therefore a double taxation convention is meant to enhance bilateral economic relations between the two countries.

Double taxation refers to the fact that two countries collect simultaneously taxes on the same company. This situation often arises when companies have subsidiaries or branches in various countries.

The cantonal laws and tax rates in Switzerland may vary considerably from one canton to another, which is why it’s important to carefully consider where you establish a company in Switzerland.

The Swiss tax system is characterized by various levels of direct taxation: direct federal tax, cantonal taxes and municipal taxes. The tax legislation in the individual Swiss cantons is often very different from one canton to another.

The taxes in Switzerland can be divided into three major categories: federal taxes, cantonal taxes and municipal taxes. In order to avoid overlapping taxation, Switzerland has concluded double taxation agreements with most industrialized countries, to protect foreign investors from double taxation.