|
Custom-tailored tax solutions
Careful tax planning can result in tax savings,
in some cases substantial. Thanks to the liberal Swiss tax laws,
the Greater Zurich Area can offer custom-tailored tax solutions.
The total tax rate for companies can amount to less than 8%
depending on the location, line of business and company or
corporate structure.
Tax privileges based on regional headquarter
relocation
The most frequently used instruments and models of tax
optimization in the Greater Zurich Area are advance tax rulings,
tax relief and tax-privileged corporate structures.
Advance Tax Ruling
Companies can request a binding advance ruling on the effective
tax charge from the fiscal authorities. Tax exemptions are
granted on a case by case basis.
Tax relief
The canton and municipal tax authorities are permitted to grant
tax incentives for newly established businesses. The amount of
the incentive depends on location, type and amount of
investment, value creation and the number of jobs created.
Negotiations between companies and business-friendly authorities
are usually concluded within two weeks to two months.
 Swiss
Tax System
Cost
Benefit: Favorable Corporate and Personal Taxes
Tax privileges based on corporate structure and
headquarter relocation Multi-national companies can
substantially lower their group-wide tax burden by setting up a
regional (European/EMEA) headquarter or a service center in the
Greater Zurich Area. Headquarters in Switzerland often serve as
interface between the parent company and its international
business, most of which is generated abroad and taxed in
Switzerland.
Tax optimizing example 1
Holding Company
Effective tax rate below 8%
Companies that merely organize the management of investments
in holding companies in Switzerland can apply for the tax
privilege of the holding, or holding company.
A holding is only subject to federal taxation; income from
dividends, capital gains from non-eligible holdings, interest,
licensing fees and similar income are taxed at 7.83%; in
addition, there is income tax relief on dividends and capital
gains from eligible holdings; with the exception of cantonal tax
on capital (0.002-2.02%), no other taxes are charged at canton
or municipal level. CFC (Controlled Foreign Corporation)
regulations do not apply.
Structural and operational conditions for a holding in
Switzerland:
Tax optimizing example 2
Mixed Company
Effective tax rate 8-12%
Companies that move their administrations to
Switzerland can apply for the tax privilege of the mixed
company.
Mixed companies enjoy a strongly reduced tax rate of 8-12% on
income generated outside the country. Income generated in
Switzerland is taxed at regular rates. There is also the
possibility of reduced federal taxes and exemption from cantonal
taxes on the dividends and capital gains from eligible holdings.
Finally, they are charged a capital tax between
0.005%-0.3%.
Managing and operating a mixed company in Switzerland makes it
possible to have a presence in the European market with the
operative and commercial side of the business, but being taxed
entirely according to Swiss law. In the total accounting, in
addition to various tax rates for individuals and companies,
other cost factors such as traffic accessibility, availability
of real estate and of workers will come into play, depending on
the canton.
Structural and operational conditions for a mixed company in
Switzerland:
 |
At least 80% of
the earnings and 80% of the expenses are generated
abroad |
 |
|
|
Commercial
activities in Switzerland are permitted for a mixed
company provided they do not exceed not 20% of the
company’s revenues and expenditure |
|
