Switzerland: “Tax holidays” for companies in Geneva

Switzerland: “Tax holidays” for companies in Geneva

Voters in Geneva decided against an initiative and against a counterproposal concerning the “tax holidays” practice, whereby some Geneva based entities benefit from an exemption from cantonal and communal taxes on their profit and capital, for a period ranging from five years to 10 years.

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The referendum concerned whether to maintain the practice of providing tax holidays. In advance of the vote, the State Council prepared a counterproposal aiming to maintain the tax holidays practice, but amending the rules. The voters, however, rejected both the initiative and the counterproposal. As a result, the tax holidays practice continues in Geneva for the time being.

Therefore, companies eligible to benefit from full cantonal and/or communal tax holidays have an effective income tax rate of 7.83% for the period of the holiday (ranging between five years to 10 years). In 2015, the Geneva State Council granted six “tax holidays” to companies located in the canton. These companies included “start-ups” as well as international groups implementing a European presence in Geneva.

 

Read a March 2016 blog article posted by the KPMG member firm in Switzerland: Tax holidays still granted in Geneva!

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

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