In Pfaeffikon SZ legal entities pay low rates of tax. Corporate income and capital taxes (annual tax on the net wealth of the entity) are calculated in accordance with a proportional rate, and are imposed by the canton, region and municipality. The federal government only imposes tax on profit. The venue of the taxation is deemed to be the registered domicile of the company or the effective place of business.
For Pfaeffikon SZ the tax on capital is 1,035% per year (Tax 1,035 per Mil, Tax 1,085 per Mil. incl. church) so a capital of $15.000.000 = Tax $15.525.
Following a hearing of the domiciliary municipality, Pfaeffikon SZ grants companies which relocate to Pfaeffikon SZ and which serve the economic interest s of the canton, a reasonable partial tax break for the first ten years. An essential change in the operating activities is deemed equivalent to a new opening. The granting of a tax break is linked to certain criteria and conditions.
Operating stock corporations (stock corporations "AG", limited partnerships "Kommandit AG", limited liability company "GmbH") and co-operatives
Associations, foundations and other legal entities:
Pure holding companies:
Holding companies comprise stock corporations and co-operatives whose purpose and principal function comprises the long-term administration of participations, and which do not exer4cise any business activities in Switzerland.
Theses stock corporations, co-operatives, associations, foundations and permanent establishments of non-domestic legal entities which perform an administrative function in Switzerland but which do not exercise any business activity and which moreover do not have any employees.
These are stock corporations and co-operatives whose business activities have a largely non-domestic focus and which exercise only a secondary business activity in Switzerland. At least 80% of gross earnings must derive from non-domestic sources, and 80% of expenses for own performances or for performances rendered by third parties must be incurred abroad.
Taxes represent expenditures
Taxes are deemed to be part of business expenditure and therefore can be deducted when calculating taxable income.
Rules governing expenses
The Tax Administration approves rules governing expenses which meet the statutory criteria, and does so quickly and unbureaucratically.
In the case of approved rules governing expenses employers do not need to list the effective expenses in the salary statement. This significantly simplifies corporate administrative procedures.