Swiss Corporate Tax
Swiss corporate tax — 11.85% in Zug.
The lowest rate in Switzerland.
Switzerland taxes corporate income at three levels: federal (7.83% effective), cantonal, and municipal. In Zug — where Goldblum & Partner is based — the combined effective rate is 11.85%, the lowest in Switzerland. The participation exemption, patent box, and R&D super-deduction reduce effective rates further for qualifying structures.
11.85%
Zug combined rate
7.83%
Federal effective rate
35%
Dividend withholding tax
8.1%
Standard VAT rate
Key Data
Corporate Tax Rate by Canton
Combined effective CIT rate (federal + cantonal + municipal), 2026
Tax Rates
Swiss corporate income tax —
federal, cantonal, and municipal
Switzerland uses a three-tier corporate tax system: federal, cantonal, and municipal. The federal rate is fixed across all cantons. The cantonal rate is the primary planning variable — and Zug's rate of 11.85% combined is the lowest in Switzerland (KPMG Clarity on Swiss Taxes 2025).
Three-tier tax breakdown — Zug canton
DBG Art. 68
Applied on net profit after cantonal/municipal taxes. The statutory rate of 8.5% is applied to the pre-tax result; the effective federal rate is approximately 7.83%.
KStG Zug
Cantonal multiplier of 80% on cantonal basic tax, with Zug municipality at 58%. Results in ~4.02% additional burden. Other cantons range significantly higher.
KPMG Clarity 2025
Lowest combined effective corporate income tax rate in Switzerland. Applies to standard operating companies. Holding structures eligible for participation exemption may see effective rates below 1% on dividend income.
Combined effective CIT — selected cantons (KPMG 2025)
11.85% vs. 25% UK
Zug advantage on CHF 500,000 profit
On CHF 500,000 profit: Zug taxes approximately CHF 59,250 total. UK at 25% would tax CHF 125,000. The annual saving of approximately CHF 65,750 compounds materially across a multi-year holding or operating structure. Within Switzerland, the spread between Zug (11.85%) and Bern (20.54%) alone is nearly 9 percentage points — CHF 43,450 per CHF 500,000 profit.
Tax Reliefs
Four mechanisms that reduce
your effective Swiss tax rate
Switzerland's post-STAF (2020) tax framework provides four statutory mechanisms that reduce the effective corporate tax rate for qualifying companies — without requiring a special ruling or advance pricing agreement.
Participation exemption
DBG Art. 69–70Up to 100% relief on qualifying dividends
Dividends and capital gains from qualifying participations are effectively exempt from federal and cantonal corporate tax. Threshold: ≥10% ownership OR ≥CHF 1,000,000 fair market value. Minimum holding period for capital gains treatment: 1 year.
Patent box
StHG Art. 24aUp to 90% reduction on qualifying IP income
Up to 90% reduction of qualifying net IP income from the cantonal taxable base. Available in all 26 cantons since the STAF reform (effective 1 January 2020). Combined benefit cap: patent box + R&D super-deduction cannot together exceed 70% of cantonal taxable profit.
R&D super-deduction
StHG Art. 24bUp to 150% deduction on qualifying R&D expenditure
Qualifying R&D expenditure can be deducted at up to 150% (vs. standard 100%) from the cantonal taxable base. Cantonal-level relief only — no federal equivalent. Combined with the patent box, subject to the 70% cap on cantonal taxable profit.
Loss carryforward
DBG Art. 677-year loss carryforward
Tax losses can be carried forward and offset against future taxable profits for up to 7 years. No loss carryback provision. Losses not utilised within 7 years are forfeited. No restriction on the amount that can be carried forward within the 7-year window.
Dividend withholding tax (VStG)
35%
Federal withholding tax applied to dividends at source. Swiss resident shareholders reclaim via personal tax return. Foreign shareholders recover to treaty-reduced rates (typically 0–15%) via the applicable double taxation treaty. Switzerland has DTTs with 100+ jurisdictions.
Participation exemption eliminates effective tax on qualifying dividend income at the corporate holding level (DBG Art. 69).
VAT / MWST (MWSTG)
Applies to most goods and services (MWSTG, in force 1 January 2024).
Food, books, newspapers, medicines, agricultural goods.
Hotel and accommodation services.
Annual worldwide turnover. Mandatory registration above this threshold (MWSTG Art. 10).
OECD Pillar Two — impact on standard clients
Switzerland implemented the OECD global minimum corporate tax (15% floor) via QDMTT from 1 January 2024 and IIR from 1 January 2025. This applies only to MNE groups with consolidated annual revenue exceeding EUR 750 million. For the majority of foreign entrepreneurs and SMEs forming a Swiss AG or GmbH, Pillar Two is not relevant — the 11.85% Zug rate remains fully available without any top-up obligation.
FAQ
Frequently asked
questions
Precise answers to the most common questions about forming a company in Switzerland. For specific advice on your structure, book a free consultation.
Free consultationOfficial Sources
- ESTV — Corporate Tax Overview
Swiss Federal Tax Administration — corporate tax for legal entities
- DBG Art. 69–70 — Participation Exemption
Federal Direct Tax Act — dividend relief for qualifying holdings
- StHG Art. 24a — Patent Box
Tax harmonisation act — IP income reduction up to 90%
- Canton Zug Tax Rates
Official Zug cantonal tax authority — 11.85% effective rate
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Baarerstrasse 25 · 6300 Zug · Switzerland · Est. 2007