types of taxes

Switzerland's corporate tax system includes federal and cantonal taxes. The total corporate tax rate includes federal income tax, cantonal income tax, and capital taxes. 

Federal Taxation

Legal entities for tax purposes are divided into two categories: 

1. Corporations (including stock corporations, partnerships limited by shares, limited liability companies), cooperatives, and SICAFs. 
2. Associations, foundations, legal entities, and collective investment schemes with direct real estate ownership.

Businesses operating or aspiring to operate in Switzerland must stay updated about its evolving culture, regulations, and economy. Understanding these changes allows you to adapt your business strategy proactively and succeed in the Swiss market. Read to learn some of the recent shifts in taxation, immigration policies, industry regulations, and consumer behavior

Recently Russian Federation and the Grand Duchy of Luxembourg have signed protocol regarding the amendments in the double taxation rules. This Protocol was negotiated following a request from the Russian Federation due to a change in its conventional policy regarding withholding taxes on dividends and interest.

The calculation of the tax rates in Switzerland is based on the net income of the taxpayer. Like in most other European countries, there are several tax deductions that can be made when a tax declaration is filed in Switzerland. These will reduce the taxable income and consequently the value of tax that needs to be paid diminishes significantly.

On the 19th of May 2019, Swiss voters voted in favour of the Federal Act on Tax Reform and AHV Financing (TRAF)—confirming the corporate taxation reform. The main purpose of the reform is to bring tax legislation in line with international standards and to remove Switzerland from the EU “Grey List”, which it has been in since December 2017. This list includes states that are under EU control and have agreed to cooperate to improve the tax system.
 

Taxes in Switzerland are levied at federal, cantonal and local level. Dividends and interests are a subject of the withholding tax, at a rate of 35%, however the withholding tax can be deducted in full, under certain conditions. 

In June 2016, the Swiss parliament passed the final corporate tax reform package meant to strengthen Switzerland as a competitive business location for foreign companies or entrepreneurs. The tax reform plan (CTR III) includes several tax reform measures related to the federal and cantonal tax laws. 

The Swiss VAT system follows the European VAT Directive. Nevertheless, there are some important differences that need to be addressed, especially when it comes to foreign suppliers of goods and services

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.

The Swiss tax system is characterized by various levels of direct taxation: direct federal tax, cantonal taxes and municipal taxes. The tax legislation in the individual Swiss cantons is often very different from one canton to another.