Paying Taxes in Switzerland

1. What is the corporate tax in Switzerland?
Swedish corporations are taxed with both a federal tax and cantonal or communal tax. The federal income tax is levied at 8,5%. Cantonal corporate income tax varies, but on average its rate is around 13%.

2. What is the VAT in Switzerland?
It is a known fact that Switzerland has the lowest VAT in Europe, rating 8% since 2011. Furthermore, reductions are available for certain supplies and services such as food, medicine, newspapers etc. with VAT rates of 2,5%.

3. How can the VAT be refunded in Switzerland?
The Government of Switzerland offers the possibility for companies that pay VAT to obtain refunds. VAT refunds are obtained only once a year and not all foreign companies are entitled to it. Basically every profit made in Switzerland is VAT taxable. However the amount can be recovered by submitting an application signed by the business owner to the Tax Authorities of Switzerland. The application should be based on original invoices and in case it is accepted the refund is processed and made within 6 to 9 months.

4. What is the dividend tax in Switzerland?
Dividend withholding tax paid by companies in Switzerland is 35%. The payment should be made within 30 days after the dividend is made. Companies with the country of residence that has a treaty with Switzerland are granted reductions.

5. Are there any incentives for foreign investors in Switzerland?
Foreign investors often choose Switzerland as a country to invest in due to the competitive economy, low taxes and welcoming environment. Also the country's geographical position and natural resources make Switzerland a prolific country to start a business. The government offers favorable conditions to both Swiss and foreign investors. However measures are taken to encourage foreign investment, including grants and loans for businesses activating in research and development, culture, information, health and communication.
 

6. Why do I need a local accountant for my Swiss business?
Switzerland is an attractive destination for foreign entrepreneurs mostly because the stable and transparent economical system. However companies need to fulfill conditions in order to function legally and financially speaking, there are certain complex procedures in need of the attention of an accountant. Most foreign companies choose local accountants for the better understanding of the system and extended experience in working in the economical environment of Switzerland. For a better result and money saved, any foreign entrepreneur is advised to collaborate with a local accountant. 

BridgeWest offers company formation in Switzerland, including virtual office and other related services.