Do you run a Swiss corporation as a sole proprietor, limited company, or partnership? Then, you are subject to the Switzerland corporate tax.
Returns from the Corporate Tax rate are a huge source of revenue for the Federal government of Switzerland. This corporate tax is paid by all companies established in Switzerland, exempting those firms who have a permanent presence and have limited tax liability.
Sigtax is at the forefront of research to give you in-depth details about the corporate tax rate in Switzerland and how to carry out strategic tax planning and protect your business revenue.
The corporate tax system in Switzerland
Organizations situated in Switzerland are required to remit corporate tax on their taxable earnings.
Firms not located in Switzerland can also be taxed if they are partners in a Swiss organization, have permanent companies founded in the country, own property, or act as a land broker. The income they make is charged by out-of-state firms.
Corporate taxes are executed at three tiers: federal, cantonal, and communal. As a result, the tax you remit relies on the region of your business.
Who pays corporate tax in Switzerland?
When it comes to remitting corporate tax, every Swiss firm is treated as a standalone entity with no tax groups or consolidation options.
All Swiss firms have been liable to the same tax rates since 2020. Before that, multinational firms often agreed on favorable rates with Swiss cantons in their respective locations.
The corporate tax rate is determined by the annual net profit of a company. Quasi corporations must only pay taxes on profits earned in Switzerland, whereas Swiss firms must remit taxes on all revenue earned.
Switzerland Corporate Tax Rate
The federal income tax rate is currently 8.5%. However, firms can decrease their taxable base, culminating in a 7.83% tax rate. Swiss cantons also establish their own supplementary corporate tax rates in addition to the federal amount.
Depending on the company's registered location in Switzerland, the maximum CIT rate on earnings before tax for federal, cantonal, and communal taxes varies from 11.9% to 21.6%.
The unique cantonal tax regimes will be phased out with the adoption of the TRAF. Examples of these include investment firms, domicile businesses, and mixed trading firms’ regimes.
The corporate tax year in Switzerland
The tax year for corporations is 12 months. Although the fiscal year coincides with the calendar year, businesses have the option of using a separate accounting period. Tax losses can be brought forward for up to seven years, but not back.
Income tax deadlines in Switzerland
The fiscal year in Switzerland aligns with the calendar year. So, you must submit your tax return 3 months later, on March 31, in most cantons.
Most cantons provide one free extension, with the option to pay for another if necessary.
Switzerland's income tax forms
TCantonal entities are in charge of tax returns. So, simply enter your home canton on the Swiss government's site to visit a webpage where you can submit your tax return.
Spouses must sign a joint tax return that is filed by them.
Ensure you have all the following required documentation before filling out the relevant forms:
- Receipts of donations made
- Private Swiss pension statements (third pillar)
- Special payments into occupational pension fund statements (second pillar)
- Health-care expenditures
- Bank statements
- Professional expenditures
- Payroll statements
- If you own a property, you'll also require records of property taxes, mortgage interest, maintenance and repair charges, as well as operating and administrative expenses.
Filing your corporate tax
The filing of a Swiss tax return is required once a year, with dates varying by canton. However, the amount is payable six to twelve months following the conclusion of the fiscal year.
Some cantons have websites where you can download the necessary forms. Other cantons, on the other hand, may require you to go to your local tax office and pick the forms. From there you can fill out each section of the form that pertains to your situation. You'll need to print them out and sign them where necessary if you're filling them online.
You may require the following supporting documents:
- Salary statements
- Year-end statements from all bank accounts, securities, and custody accounts showing interest and dividends earnings.
- Documents showing the purchase of things like bonds, equities, and funds.
- AHV pension statements
- Swiss life insurance statements
- Invoices, bills, and receipts
The Swiss government provides links to each canton’s online tax site.
Why Choose Sigtax For Corporate Tax Advice in Switzerland?
Sigtax is a company well-versed in Swiss and international corporate tax rates and is up to date on the latest tax trends. The company is a powerful asset to international clients, with well-seasoned tax advisors based in 12 different countries. These advisors work in teams assembled to meet the needs of clients.
We have a thorough understanding of corporate tax rates and legislation, as well as many other related business aspects. We keep clients and industry professionals informed of the most recent tax news and technical developments from its international centers of expertise and Swiss tax offices.
Sigtax's tax planning expertise includes:
- Tax return preparation
- Tax planning, optimization, and advice
- Representation in front of designated taxing authorities
- Accounting and VAT consulting for Switzerland and the EU
- Accounting and consulting for Swiss and EU withholding taxes
For more information, contact us today.