Corporate Tax Rates

Attractive Corporate Tax Rates in Switzerland

Actual tax rates of under 8% are possible in the Greater Zurich Area. The criteria to achieve this include a well-considered choice of location combined with careful planning of your corporate structure. The Greater Zurich Area boasts an extremely attractive tax system compared to the rest of Europe.

The cantonal taxes on profits for companies range between 8% and 12%. The Confederation (state) levies a nominal 8.5% (or 7.83% in real terms) tax on corporate earnings throughout Switzerland.

Taxes in Switzerland are levied on three federal levels – state, canton and municipal – whereby the individual levels can set the tax rates independently to a great degree.

Tax rates in Switzerland depend on what corporate structure you choose for your company. In the Greater Zurich Area, you have the option of requesting a tax ruling – which is an agreement regarding the levying of the tax burden – from the authorities.

In Switzerland in general, the liberal principle of equality is manifested in the tax system as well: A uniform, relatively low tax rate by international standards is contrasted with an almost complete forgoing of direct subsidies.

 

 

Taxation on three levels

Switzerland's federal structure shapes the country's tax system. Companies and individuals are taxed at three different levels:

  • national level (federal taxes)
  • cantonal level (cantonal taxes)
  • communal level (communal taxes)

Regardless of being taxed at three different levels, all taxes are collected by a single authority. Companies are taxed where they create value, i.e. where the company is based or where it carries out its business activities.

Corporate Tax Comparison

Location %
Schwyz (Greater Zurich) 12.5
Ireland 12.5
Schaffhausen (Greater Zurich) 14.4
Zug (Greater Zurich) 14.5
Uri (Greater Zurich) 14.9
Glarus (Greater Zurich) 15.7
Grisons (Greater Zurich) 16.7
Solothurn (Greater Zurich) 18.3
Zurich (Greater Zurich) 18.9
Netherlands 25
Luxembourg 29.2
Labor Force

Labor Force in Switzerland

Qualified workers are numerous in the Greater Zurich Area and can be recruited quickly. Liberal labor laws and low ancillary wage costs make the Greater Zurich Area lucrative for employers, while excellent salaries and the high quality of living attract top-qualified employees from abroad as well.

Swiss law generally avoids over-regulation for companies and thus offers more latitude for signing direct agreements which mutually benefit both the employer and employee.

Ancillary wage costs and social security contributions in Switzerland and the Greater Zurich Area are low when compared internationally. At the same time, the excellent salaries and high quality of living attract top-qualified employees from abroad and facilitate recruitment from all over Europe as well as Asia and the USA: Around 20% of the labor force in Switzerland consists of foreigners.

In addition to international and multilingual workers, the high productivity and long working hours ensure an outstanding cost-benefit ratio in favor of employers.

Motivation of employees

Nation Score
Denmark 8.06
Switzerland 8.06
Norway 7.74
Austria 7.62
Germany 7.59
Commercial Real Estate

Swiss Commercial Real Estate

The Greater Zurich Area boasts an attractive real estate market with a wide offering that will meet your needs precisely. Real estate prices depend on the location and purpose of the property and can vary widely, particularly between urban and rural locations.

The Greater Zurich Area offers an excellent network of real estate service providers. These include property owners, real estate agents, architects, municipalities, fiduciaries, associations, firms and banks. We will help you to find the right property for your project that will meet all your needs.

Temporary solutions in business centers are an excellent alternative for companies wishing to keep their infrastructure lean because, for example, their company representative is seldom present in Switzerland.

Average rent CBD US­$ per square meter and year

[Translate to Englisch:] Region Rent
Zurich 488
Geneva 499
New York 607
London City 848
London West 1444
Financing Costs

Low Financing Costs Thanks to Low Interest Rates

The effective interest rates for outside capital vary from 2%–7%, depending on the customer. Compared to the rest of the world, the capital costs in Switzerland have remained extraordinarily low for years. 

Switzerland enjoys an excellent reputation among foreign investors. Based on this reputation and a high savings rate, Switzerland offers low interest rates, resulting in reduced financing costs.

In addition to low interest rates, Switzerland's traditionally low inflation rate is another advantage. It has remained under one per cent in the past few years. With the Swiss franc, Switzerland also offers an independent and extremely stable currency.

The Swiss financial center is known to be a magnet for investors and major international companies, particularly in the technology sector: The SIX Swiss stock exchange in Zurich specializes in "Initial Public Offerings" (IPOs) for technology companies and has proven to be very attractive for forward-looking technology investment funds in areas such as nanotechnology.

Cost of Capital encourages business development

Nation Score
Switzerland 8.18
Sweden 7.82
Germany 7.36
Norway 6.97
Netherlands 6.93
Transportation Connections

Ideal Transportation Connections in Switzerland

Its central location and outstanding infrastructure make the Greater Zurich Area the ideal commercial hub for your business, as your travel times will be significantly reduced. The first-class transportation infrastructure smooths the way for reliable and efficient business operations.

It takes a maximum of 60 minutes to travel to Zurich Airport – from anywhere in the Greater Zurich Area. From downtown Zurich, you can be at the airport in just 10 minutes.

With its central location in the heart of Europe, the Greater Zurich Area boasts fantastic transportation connections. Its dense network of roads and railways and proximity to Switzerland's international airports guarantee optimum mobility and a high degree of punctuality for private and public transportation.

The Greater Zurich Area connects you to the entire world: From Zurich Airport, you can fly directly to 186 destinations, 134 European destinations in 36 countries and 52 intercontinental destinations in 26 countries. (Source: Zurich Airport)

 

 

Cost of Transportation

CHF 4.30

One-way ticket (local transport) 

CHF 89.00

Monthly pass (regular price)

CHF 7.00

Taxi start (normal tariff)

CHF 3.80

Taxi 1km (normal tariff)

CHF 1.55

Gasoline 1 liter

 
Source: Numbeo (2015)

Quality of Air Transportation

Nation Score
Switzerland 9.11
Denmark 9.11
Netherlands 9.01
Iceland 8.99
Norway 8.85
Market Access

Moderate Market Entry Costs

Independent and yet a central component of the European market: Thanks to bilateral agreements with the EU, Switzerland is an ideal commercial hub for accessing the entire European market. A further advantage for you is that multilingual Switzerland is not just ideally suited as a test market but also impresses with its strong purchasing power.

Eight million consumers, multilingual and multicultural: Opening a branch in the Greater Zurich Area not only guarantees access to the Swiss domestic market with the world's highest purchasing power but also opens up the European market with 500 million consumers.

In addition to its membership in the WTO and EFTA, Switzerland is connected to the EU thanks to detailed agreements that guarantee free trade and the free movement of persons between countries.

Purchasing Power

Nation Score
Liechtenstein 460,9
Switzerland 309,4
Luxembourg 221,2
Norway 204,0
Iceland 177,5
Private Individuals

Taxes and Housing for Private Individuals

Private individuals in the Greater Zurich Area profit from a very favorable income tax rate. In addition to attractive tax rates, the Greater Zurich Area also offers a real estate market to match – with an excellent selection of properties, apartments and houses to rent or buy.

Real estate prices depend on the location and building standards of the property and can vary greatly, especially between urban and rural settings.

For expatriates, i.e. foreigners who currently work in the Greater Zurich Area and are subject to taxation, there are special tax deductions which can be applied to the direct federal tax, as well as to most of the cantonal taxes.

Expatriates are either assessed individually or are subject to withholding tax, which their employer deducts directly from their salary. The tax rates take into account tax-free contributions for work-related expenses, insurance premiums and family maintenance. Additional expenses such as moving costs or school fees for international schools are also potentially deductible.

Tax Burden on Highly Qualified Manpower*

Nation %
Czech Republic 25.9%
Greater Zurich Area* 26.8%
Poland 31.8%
Slovenia 32.5%
Germany 39.0%
Luxembourg 39.8%
Norway 41.0%
United Kingdom 46.0%
Ireland 49.0%
Belgium 56.0%

 

BAK Basel 2013
*Effective tax rate on gross wages to achieve an after-tax income of EUR 100,000 (2010 price basis) in the cantonal (Swiss locations) or commercial capital of a country (international locations). In %. Average exchange rate from 2009 to 2012 of the national currency to the euro as the basis.

**Greater Zurich Area: average rates of the Cantons of Glarus, Schaffhausen, Schwyz, Zug and Zurich
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