Corporations
- Joint-stock company
- Limited liability company
Sole proprietorships or partnerships
- Sole proprietorships
- Collective enterprises
- Limited partnerships
Taxation of corporations
Corporations, such as joint-stock companies or limited liability companies, must pay tax on profits (corporate income tax) and capital. There is a clear distinction between the company and the shareholders/partners.
Corporate income tax is levied on the net profit posted by a corporation. The unjustified expenditures (unjustified depreciation and writedowns or provisions, constructive dividends, etc.) are also taxable.
The federal government (8.5%) and most cantons (2–24%) apply a proportional tax rate. All other cantons have a mixed system that accounts for "earnings intensity."
The cantons (but not the federal government) charge capital tax on the company's capital. In most cantons, this is the share capital or nominal capital as well as the declared reserves. The tax is charged proportionally except for in the canton of Valais.
Depending on the canton, the capital tax is between 3% and 9%.
If shareholders or partners receive a dividend, they must pay tax on these as private individuals as capital gains. If a shareholder/partner owns more than ten percent of the company shares, then only about 50% of the dividend must be taxed.
A separate tax return is needed for corporations.
If a dividend is paid out, this results in double taxation (income tax on profits, corporate income tax on dividends). The same problem occurs with share capital by way of tax on capital and wealth tax (equity value).
Taxation of sole proprietorships and partnerships
The profits taken by a sole proprietorship or partnership (sole proprietorship, collective enterprises, and limited partnership) are taxed as income at the personal rate of the owner. Private wealth tax is charged on the company assets.
Aggregate income means wages paid as well as the profits and interest that the company has generated.
Assets mean private and business assets that are taxed at the personal tax rate. Private and business assets are subject only to cantonal and municipal tax. The federal government does not charge wealth tax.
No separate tax return is needed for the company. Owners of sole proprietorships and partnerships declare company profits and assets on their private tax returns.
The owners of sole proprietorships or partnerships cannot deduct the taxes paid from their taxable income with the federal government or the cantons.
Value-added tax
Value-added tax (VAT) is an excise tax but is not charged directly to the individual consumers. The tax is charged to producers, manufacturers, retailers, tradespeople, and service providers who deliver goods or provide services to consumers.
Under the Federal Act on Value Added Tax, anyone who operates a company regardless of its legal form, purpose, and profit plan and generates annual revenue in excess of CHF 100,000 must pay this tax.