Special: Taxation of Mixed Company
Legal form: stock corporations, limited commercial partnerships, limited liability companies, co-operative associations, secondary branches of foreign stock corporations or a pure business establishment of foreign incorporated firms.
The business activity must mainly be carried on abroad. In the case of trading companies, at least 80% of the sales/purchases must take place abroad. Mixed companies may not carry on their own production and trading activities in Switzerland.
BASIS OF CALCULATION OF TAX ON PROFIT
The taxable net profit of a mixed company is established by calculation on the basis of the different divisions of the company.
Taxed at the ordinary rate are:
- investment income (interest, dividends and capital gains) from Switzerland
- income from intangible rights (licensing and trademark rights) from Switzerland (permissible up to 20%)
- trading income from Switzerland (permissible up to 20%)
- income favoured by double taxation agreement (interest and licence fees), for which taxation in Switzerland is required
- income from property in land in Switzerland (incl. market-based own rent).
The allocation of expenditure usually takes place on a property basis by calculation on the basis of the different divisions of the company or, where this is not done, on a proportional basis, with administrative costs and taxes being deducted on a flat basis.
Income from abroad will be taxed on the basis of the number of employees (full-time positions) of the group in Switzerland:
Up to 5 employees 10%
6 to 10 employees 15%
11 to 30 employees 20%
over 30 employes 25%
Where a company is under Swiss control, the taxable proportion is increased by 10%, but the proportion of taxation does not exceed 25%. The total profit is of decisive importance when determining the rate.
Tax free is net income from important investments in accordance with s. 67 of the Steuergesetz (StG) ('Tax Act') (dividends and capital gains), while bearing in mind the investment losses (depreciation and reserves). Net losses may not be offset against domestic and/or foreign income.
RATE OF TAX ON PROFIT
The rate of tax on profit is:
4 % in the case of the first CHF 100,000
7 % in the case of profit in excess of CHF 100,000.00
The simple tax is multiplied by the applicable tax rate.
CAPITAL TAX
Subject to capital tax is equity capital. Capital tax is 0.01% of the taxable equity capital , but no less than CHF 250.00, multiplied by the applicable tax rate (s. 75 para. 1 of the StG).
Equity capital consists of the paid-up share capital, capital stock or nominal capital, the participation capital, the open reserves and the hidden reserves formed from after-tax profit as well as the balance sheet profit. Taxable are at least the paid-up share capital, capital stock or nominal capital, including the paid-up participation capital (s. 72 of the StG).
Equity capital is calculated on the basis of the situation at the end of the tax period (s. 78 of the StG).
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