Capital tax

In Switzerland, capital tax is one of the most important taxes, applied by both the cantons and the Confederation. It is a direct tax on the wealth of taxpayers and applies to both individuals and legal entities. The tax calculation is based on the net value of the taxpayer’s assets, including real estate, investments, and financial assets. Capital tax rates vary from one canton to another and can differ depending on the category of taxpayer (individual or legal entity). For more information on tax rates for this tax, please refer to the dedicated page. In general, individuals are subject to capital tax in the canton where they are domiciled, while companies pay capital tax in the canton where their registered office is located. 

Subjecting capital companies to tax

Capital companies are legally independent businesses, owning their own assets and legal personality. They can take the form of public limited companies (SA), limited liability companies (Sàrl), partnership limited by shares (SCA), or general partnerships (SNC). Capital companies are subject to capital tax in Switzerland, generally calculated based on the net value of the company. This value is obtained by subtracting the debts from the total value of the company’s assets. The capital tax rate varies from canton to canton and depends on the amount of the company’s net value. In addition to capital tax, capital companies are also subject to profit tax, which is a direct tax on company income. This tax is calculated based on the profits made during the fiscal year.

Subjecting associations, foundations, and other legal entities

Associations, foundations, and other legal entities are also subject to capital tax in Switzerland, depending on their legal form and activity. They are generally taxable in the canton where they are domiciled. In general, associations, foundations, and other legal entities are subject to capital tax if their share capital or net worth exceeds a certain threshold, which varies according to Swiss cantons. The share capital represents the amount of the entity’s equity, i.e., the difference between its assets and liabilities. The net worth corresponds to the total value of the assets minus the total value of the debts. The threshold at which associations, foundations, and other legal entities are subject to capital tax is generally higher than that which applies to businesses.

Calculating capital tax for companies in Switzerland

The calculation of capital tax for companies in Switzerland varies according to the canton where the company is located. In general, capital tax is calculated based on the fiscal value of the company’s capital, which is determined based on the company’s assets and liabilities. The fiscal value is often lower than the real value of the company’s assets, which can be advantageous for businesses. The capital tax rate also varies according to the canton. Some cantons apply a fixed rate, while others use a progressive rate depending on the value of the capital. In some cases, cantons may also apply different rates for foreign and national companies. Companies can also benefit from tax reliefs such as deductions for capital losses or investments in intangible assets such as patents and trademarks. Companies can also benefit from reduced tax rates for profits reinvested in the business.

Special tax regimes for companies in Switzerland regarding capital tax

In Switzerland, there are special tax regimes for companies wishing to establish their registered office or their research and development activities in the country. These tax regimes are designed to encourage companies to invest in Switzerland and to promote innovation. Some cities and cantons offer special tax regimes for high-tech and innovative companies. These regimes can offer reduced tax rates for profits reinvested in the business, as well as tax reliefs for investments in research and development.