Tax Minimization in Switzerland

Tax Minimization in Switzerland

Updated on Monday 23rd March 2020

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Tax-Minimization-in-SwitzerlandTax minimization solutions in Switzerland

 Tax minimization is a general term employed by investors wanting to reduce their taxes on profits in a legal way. Before starting a business in Switzerland, you should know that there are few solutions available for companies in Switzerland that want to refer to this possibility in order to minimize the payments made on taxes. Our law firm in Switzerland can provide clients the following tax minimization solutions:

  • -          to employ the investment incentives Switzerland provides for foreign businessmen;
  • -          - to use the benefits offered by the cantons in terms of taxation,
  • -          to make charitable donations,
  • -          to use the double tax treaties Switzerland has with other countries,
  • -          to apply for tax deductions or exemptions where possible.

Another way to reduce taxation is to draw a financial plan and our lawyers in Switzerland can provide tailored solutions for foreign investors wanting to open companies in this country.

More details on the tax minimization procedures available in Switzerland are presented in the video below:

Tax privileges in Switzerland

As mentioned before, Swiss cantons provide tax privileges to foreign investors. All cantons in Switzerland offer tax privileges based on the cantonal tax laws. Companies in Switzerland can benefit from tax privileges for unlimited amounts of time. Companies can also benefit from participation deductions that are usually granted as tax reliefs for certain types of dividends and capital gains. The participation deduction in Switzerland usually results in an exemption on the participation income.

Holding companies and mixed companies in Switzerland

Swiss holding companies must own the majority shares and managing investments in other companies. It is also required for the Swiss holding not to conduct any commercial operation in the country and two thirds of the company’s assets must be qualifying shares. The tax minimization solution that Swiss holding companies can benefit from is the fact that the corporate income tax will be levied at federal level only at the rate of 7.8% and dividends and capital gains made from qualifying investments will be exempt from taxation. Mixed companies operating mainly outside Switzerland will benefit from reduced tax rates that range between 8.5% and 12%.

Other incentives in Switzerland

Investment incentives can be provided for the redomiciliation of new foreign companies to Switzerland. These incentives can be granted as tax holidays that can reach up to ten years at federal level or in certain cantons. Incentives are also offered to companies creating new employment opportunities. These incentives can also be given under the form of low interest loans when buying properties. Tax incentives are available for companies investing in equipment that protects the environment.

There are many tax minimization solutions available and clients can contact our Swiss lawyers for the details on the best solution for them.