“Swiss tax authorities understand business and are open to finding solutions. A company arriving here will know how it will be treated before, during and after its stay.”

A global tax & legal and advisory services firm

One of the most beneficial tax systems in europe

Favorable tax rates are frequently cited among the most important criteria in deciding where to base a new business. With its high gross wages and comparatively low tax burden (individual and corporate), the GREATER GENEVA BERNE area (GGBa) is an appealing place for employees and employers.

• Average monthly income in Switzerland is SFr 6,298, of which about 70% remains after social security contributions and taxes. The country’s workers have among the highest purchasing power in the world;
• The total tax take (federal, cantonal and municipal) represents only around one third of GDP, well below the European average. Value-added tax, at 7.6%, is also among the lowest in Europe;
• In international comparisons, Switzerland’s personal and corporate taxes are not deemed to discourage executives to seek advancement, nor to discourage entrepreneurial activity.

Cantonal variation

In accordance with Switzerland’s federal structure, each GGBa canton sets its own tax levels. This is important because cantonal and municipal deductions amount to 70% of all tax revenue, making for local variation and leeway for the negotiation of tax issues, such as:

• Complete or partial tax holiday on capital for up to 10 years;
• Tax rulings for holding companies, as well as domiciliary and service companies, which conduct their activities outside Switzerland.

These incentives are granted to newly established businesses in key industry sectors and depend on many criteria including job creation.

Company profits and individual income are taxed at the federal, cantonal and municipal level. In addition, the cantons and municipalities impose a capital tax on companies and a wealth tax on the assets of individuals. Taxes are deductible as a business expense, lowering the effective net tax rate.

A less taxing future

Switzerland’s federal system makes any sweeping changes very difficult to implement. Historically, tax-raising initiatives are voted down by cantons and in popular referendums.

Tax planning to minimize obligations

There are many ways of structuring your business operations to optimize your company’s tax situation. Our representatives can put you in touch with tax planning professionals who have helped many foreign businesses establish themselves in the region.