Switzerland

Corporate taxation

The corporate income tax rate is 14.93%.

However, all 26 cantons apply different tax rates and in most of them the statutory tax rate needs to be multiplied with the communal and/or cantonal coefficients that may vary from tax period to tax period.

Special corporate tax incentives

All taxes – including corporate income taxes – are deductible when computing the tax basis, hence the effective corporate income tax rates are lower than the rates published in the tax codes.

Switzerland has special tax incentives for companies who predominantly trade internationally to benefit from the advantageous “mixed-company” status that allows them to be taxed at a rate of just 8,5%. Special tax incentives also apply to IP income (royalty, licence)

Transfer pricing

According to the case law of the Swiss Federal Supreme Court (See below), Article 58 of the Federal Law on Federal Direct Tax of December 14, 1990 and Article 24 of the Federal Law on Harmonization of the Cantonal and Communal Taxes of December 14, 1990 create the necessary legal basis for application of the Arm’s Length Principle. Both articles deal with the taxable basis for corporations. Switzerland relies on OECD transfer pricing guidelines as a source for the interpretation of the arm’s length principle.

Links

Transfer Pricing Case Law

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Cases involving Switzerland

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