Corporate taxation – attractive business location with low tax rates
As a lean country with low tax rates and levies, Switzerland is an attractive location for international companies.
As a lean country with low tax rates and levies, Switzerland is an attractive location for international companies. A global comparison of low-tax countries by PwC in 2015 showed that only Ireland offers more favorable corporation tax rates. Compared with Switzerland's average rate of 17.85% and lowest rate of 12%, companies in the United Kingdom, Sweden, the Netherlands, Luxembourg, Germany and France are taxed at considerably higher rates.
As the Swiss taxation system mirrors the country's federal structure, the effective tax rates for companies are different in each canton, ranging from 12% to 18%. At the federal level, a statutory tax rate of 8.5% currently applies for limited companies and partnerships. Associations, foundations and other legal entities as well as investment funds will continue to be taxed at 4.25% until the tax reform in 2019. Companies and individuals in Switzerland also benefit from good relations between the authorities and businesses as well as a range of double-taxation treaties. Furthermore, the country's VAT rate is the lowest in Europe, at just 8%.