Taxation in the Canton of Zug

The Canton of Zug is considered to be the canton with the most favourable tax system and can also be described as a particularly uncomplicated and unbureaucratic canton in the way in which the cantonal tax authorities deal with tax-payers.

In theory, all natural and legal persons in the Canton of Zug are liable to pay tax if they have their place of residence or domicile or a business establishment in the Canton of Zug.

The liability to pay tax is also established in the double taxation agreements.

Direct Federal tax, cantonal tax and municipal tax are levied on the income (profits) of a company. The capital will only be subject to cantonal and municipal tax.

Companies will be taxed differently depending on their particular activity. A distinction is made between:

  • operating,
  • holding,
  • domiciliary company and
  • mixed companies.

Holding, domiciliary company and mixed companies have tax privileges in the Canton of Zug (see: tax privileges in the Canton of Zug).

Operating companies are subject to ordinary taxation in the Canton of Zug. Operating companies are companies which carry on a commercial, manufacturing or service enterprise in the Canton of Zug.

Subject to tax are taxable net profit and paid-up share and nominal capital as well as open and hidden reserves.

TAX RATES IN ZUG

  Capital and reserves Profit
Direct Federal tax 0 8.5%
Cantonal/municipal
simple tax
0.5% 4% on profits
up to CHF&nbsp100,000
7% for profit
in excess of CHF&nbsp100,000.00

TAXATION

Taxation