Tax priveleges in the Canton of Zug
Direct Federal tax favours solely holding and principal companies in that a tax reduction may be claimed at a Federal level on the basis of the income from important investments (investment deduction).
HOLDING COMPANIES
Holding companies are companies whose main aim is the permanent management of investments in other companies and which do not carry on any other kind of business activity in Switzerland. The investments held or the income from them must constitute at least 2/3 of the total shares or income.
In the Canton of Zug, the holding companies are exempt from cantonal tax on profit. Capital tax is also reduced. An investment deduction is permitted in the case of Federal tax.
Tax rates
| Capital and reserves | Profit | |
| Direct Federal tax | 0 | up to 8.5% |
| Canton/municipality | 0.02% (multiplied by the tax rate) | 0 |
INVESTMENT COMPANIES
Equity investment companies, which do not wholly satisfy the requirements of holding companies, are also granted a tax reduction for significant investments in other companies at a cantonal level which is similar to the investment deduction in the case of Federal tax.
MANAGEMENT COMPANIES
Domiciliary companies and mixed companies are described as management companies.
Domiciliary companies only have their domicile in a canton; they do not actually carry on any business activities in Switzerland. They do not have any staff or their own offices.
Mixed companies operate mainly abroad and only carry on a subsidiary business activity in Switzerland.
Taxation of management companies:
- Income from a Swiss source is to be taxed in full
- Income from a foreign source is only taxed in proportion to the importance of the activity
- Income from investments is tax free.
PRINCIPAL COMPANIES
Principal companies are companies which conduct commercial business on a commission basis with subsidiaries and sister companies abroad and award production orders to such companies.
Tax privilege: A foreign deduction may be claimed in the case of direct Federal tax.
» Do not hesitate to contact us with any questions you may have!
