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.

Tax break

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

  • Cantonal corporate income tax: 2% for the first CHF 20,000 and 4% for the net profit above CHF 20,000.
  • Cantonal capital tax: proportional 0.4 tenths of a per cent of the taxable equity capital
  • Federal corporate income tax: proportional 8.5% of the net profit with participation relief
  • Federal capital tax: none

 

Associations, foundations and other legal entities:

  • Cantonal corporate income tax: 4%, profits below CHF 10,000 are tax exempt
  • Cantonal capital tax: 0.4 tenths of a per cent of the taxable equity capital
  • Federal corporate income tax: 4.25% of the net profit, profits below CHF 5,000 are tax exempt
  • Federal capital tax: none

 

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.

  • Cantonal corporate income tax: none
  • Cantonal capital tax: 0.025 tenths of a per cent of taxable equity capital, at least CHF 100
  • Federal corporate income tax: as a rule, no corporate income tax on net profits, insofar as the entire profit represents participation income. In other respects, proportional reduction in the tax amount.
  • Federal capital tax: none

 

Domiciliary companies:

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.

  • Cantonal corporate income tax: income from participations is tax exempt; other income derived from Switzerland as well as 10% of the remaining non-domestic income is subject to ordinary taxation.
  • Cantonal capital tax: 0.025 tenths of a per cent of taxable equity capital, at least CHF 100
  • Federal corporate income tax: participation relief, same taxation as in the case of stock corporations
  • Federal capital tax: none

 

Mixed corporations

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.

  • Cantonal capital tax: 0.025 tenths of a per cent of taxable equity capital, at least CHF 100
  • Federal corporate income tax: participation deduction, same taxation as in the case of stock corporations
  • Federal Capital tax: none

 

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.

 

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