Date de publication : 06-10-1907
The following information are for the sole purpose of providing a general overview of the local taxation of the Corporate tax aspects of the country. In any case, the information provided below cannot be considered as comprehensive or deemed to constitute specific legal advice.
Yes we tax in Switzerland
New tax reform: No specific information
New tax treaties:
- Tax treaty between Switzerland and Zambia is signed.
Local tax advisors
No specific information on the local tax advisors.
Website Federal authorities: Click here
The definition of Permanent Establishment follows the wording of article 5 of the OECD Model:
- Dependent agent who habitually concludes contracts in the name of a non-resident company (except if the activity is limited to purchase of goods);
- Fixed place of business, building site, construction, assembly or installation and any related supervisory activity, for a period of 12 months.
Resident companies are taxed on their worldwide income (« worldwide principle »).
Entities are considered to be resident for tax purposes in Switzerland if they have their legal seat in Switzerland, of if their place of management & control is in Switzerland.
Note: the definitions of permanent establishment and place of residence are subject to the relevant provisions of any applicable double tax treaty, if any.
Corporate Income Tax
The general CIT tax rate is 8.5%.
Non-taxable income includes the following:
- Dividends received from qualifying participations
- Certain capital gains deriving from qualifying participations
Non-deductible expenses includes the following:
- Dividends benefiting from the participation exemption
- Interest in excess of the thin-capitalization threshold
Carry forward: Yes 7 years, but some restrictions may apply.
Carry back: No
Companies should submit the tax return annually.
Federal direct tax is payable by 31 March of the following year.
Whithholding Taxes (payment to foreign companies)
The local tax rates in Switzerland are the following, subject to the provisions of an applicable double tax treaty, if any.
There is no WHT on the profits paid from a branch to its foreign head office.
The general rate of WHT on dividends is 35% of the gross amount.
The general rate of WHT on interest is 35%.
The general rate of WHT on Royalties is 0%.
The general rate of WHT on management fees is 0%.
The general rate of WHT on technical services is 0%.
Generally, capital gains are taxed under the regular CIT as general income.
Note: capital gains deriving from real estate are subject to a separate taxation.
Note: capital gains deriving from qualifying participations are exempt under the participation exemption.
Standard VAT tax rate is 8%
Reduced tax rates are:
- 8% (among others, hotel, camping,…);
- 5% (among others, water, food, medication, newspaper, books, …)
Zero-rated supplies include, subject to certain conditions:
- exports of goods;
- International passenger transportation;
- Construction of aircraft engaged in commercial international traffic; intra-
Exempt supplies include, subject to certain conditions:
- Certain financial services ;
- Certain insurance services ;
- Training and education ;
Note: exempt transactions differ from zero-rated transactions in that the input VAT associated with exempt transactions is not deductible.
In case where for a tax period, Input VAT exceeds Output VAT, certain non-resident companies (which are not required to register and incur Switzerland-VAT in the course of their business activities in Switzerland) may apply for a refund.
Refunds are subject to the reciprocity principle, which means that Switzerland only refunds VAT to foreign companies in countries that offer similar refunds to Switzerland companies.
No other specific information of VAT in Switzerland.
The general statute of limitation is 5 years starting at the end of the year in which the tax return had to be filed.
There is no foreign exchange control in Switzerland. Income and capital could be freely repatriated.
There are thin capitalization rules in Switzerland. The interest derived from loans between related parties may not be deductible in case where interest exceeds some ratios (6 times the taxpayer’s net equity).
Do not hesitate to share your experience in Switzerland with us in the comments below. Any comments are welcome !