The calculation of the tax rates in Switzerland is based on the net income of the taxpayer. Like in most other countries, there are several tax deductions that can be made when a tax declaration is filed. These will reduce the taxable income and consequently the amount of tax that needs to be paid.
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 have decided to conclude a Convention in regard of 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 types of taxes currently existing 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.