Clarity on Swiss Taxes | KPMG | CH
Beyond limits

Clarity on Swiss Taxes

As natural limits of corporate and VAT rates are reached, digitalization drives the next phase of the tax landscape evolution.

Clarity in 100 Seconds

Digitalization in the tax landscape

Supranational regulations, such as BEPS and ATAD II, or even transnational agreements are increasingly part of the global tax landscape. Overall, ongoing global shifts have become the norm. Currently, digital megatrends are gathering speed, ready to drive the next phase of the tax landscape evolution. What does this mean for Switzerland?

Peter Uebelhart

Partner, Head of Tax, Member of the Executive Committee

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Trend toward lower corporate income tax rates

Switzerland remains attractive against the international tax competition. The cantons of central and eastern Switzerland stand out once again as having particularly low tax rates. Following the global trend, average Swiss corporate income tax rates continue to fall marginally.

-3.05% -3.05%

Note: max. effective rate on pre-tax profits for federal/cantonal/municipal taxes in the respective cantonal capital. Corporate income tax figures for AI, BL, BE, GE, GL, GR, JU and NE for 2017. Source: KPMG Switzerland

Clarity on Swiss Taxes

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Global comparison

Several tax reforms around the world – most recently in the US – are driving the ongoing trend toward lower corporate income tax. Successive cuts are also planned in parts of Europe in the coming years. Tax rates are also expected to fall in Switzerland, especially in connection with the Tax Proposal 17. Ireland, the UK, Dubai, Hong Kong and Singapur remain very attractive in terms of tax appeal.

Figures in percent

Maximum corporate income tax rates, CH: max. effective rate on pre-tax profits for federal/cantonal/municipal taxes in the respective cantonal capital. Corporate income tax figures for Bahamas, Bermuda, Cayman Islands, Dubai and Russia for 2017. Sources: KPMG Switzerland, KPMG International: https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corporate-tax-rates-table.html

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Little movement for individual income taxes

The cantons of central Switzerland have occupied the top spots in the tax ranking for over a decade. Apart from Uri, tax rate reductions were only marginal. Obwalden, Schwyz and Schaffhausen were the only cantons to increase their tax rates. Only small tariff variations can be observed among the higher-rate cantons in recent years.

Figures in percent

Note: max. income tax rates for single taxpayers with no children and no religious denomination living in the respective cantonal capital. Source: KPMG Switzerland

Stagnating averages

After a modest slide in recent years, the average maximum tax rates appear to have stabilized. Switzerland remains a highly attractive location not just for businesses, but also for individuals.

-0.89% -0.89%

Note: max. income tax rates for single taxpayers with no children and no religious denomination living in the respective cantonal capital. Source: KPMG Switzerland

Responding to reforms

Many tax jurisdictions have seen significant regulatory change in the last 12 months. Perhaps the highest profile example is the US tax reform. Initial speculation that the move could trigger a new “race to the bottom” for tax rates among Swiss cantons appears unfounded. Natural tax rate limits have been reached in many cases, and Switzerland’s Tax Proposal 17 safeguards stability for the future. Therefore, we are fully convinced that Switzerland will maintain its attractiveness for businesses and ensure legal certainty.

Stefan Kuhn

Partner, Head of Corporate and M&A Tax

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KPMG Switzerland

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Further Information

Media release

Tax landscape deceptively calm

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Tax Proposal 17

With Tax Proposal 17, Switzerland aims to remain an attractive business location. How does this affect you?

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Business Location Switzerland

How can Switzerland continue to maintain its advantage as a leading business location?

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Corporate Taxation

KPMG advises you on tax and legal issues within the framework of national and international regulations.

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