Taxes for companies and start-ups in Switzerland

The taxation of partnerships and corporations differs significantly in Switzerland.

Partnerships, such as sole proprietorships and general partnerships, are taxed at the level of the partners, with income considered to be personal income.

Corporations, such as stock corporations and limited liability companies (LLCs), are taxed at the corporate level, and dividends are taxed at the shareholder level.

Swiss tax rates vary by canton and municipality, with some regions offering particularly attractive conditions for companies.

Sole proprietorships, general partnerships and limited partnerships are not legal entities and are therefore not taxable as companies. Every owner of a sole proprietorship, general partnership or limited partnership is taxed on their private and business income as well as their private and business assets as a whole.

To what extent is the company affected?

Companies generate profits. These profits are taxed at the owner's personal tax rate.

The taxes paid cannot be deducted from the taxable net profit either at federal or cantonal level.

Assets are subject to wealth tax.

The correct distinction between private and business expenses is also necessary, for example, for business trips, company cars, meals and travel expenses, work clothing, further training, etc.

To what extent is the entrepreneur affected?

BFor sole proprietorships and partnerships, income consists of all business income (profit, salary, interest) and other income.

This total income is taxable at the federal, cantonal and municipal levels.
The private and business assets of sole proprietorships and partnerships are only subject to cantonal and communal taxes, but not to direct federal taxes.

This also applies to general and limited partnerships, where each partner is personally liable for tax on his or her share of income and assets.

When taxing PLCs and LLCs, a clear distinction must be made between private and business. Special attention must be paid to the following points.

To what extent is the company affected?

The companies generate profits. The company's equity is subject to capital tax. If a company closes a financial year successfully, it generates a profit.

Shareholders are generally entitled to a share of this profit.

The dividend is the part of the net profit that a corporation distributes to its shareholders.

To what extent is the entrepreneur affected?

IIn contrast to partnerships, there is a clear distinction between private and business life in the case of a public limited company and a limited liability company. The AG and the GmbH are taxed as companies, the shareholders and partners as private individuals.

Dividends must be taxed by the shareholders/partners as income from capital assets. If a shareholder/partner holds more than 10 % of the company, only approx. 50 % (depending on the canton) of the distribution must be taxed.

On the other hand, the clear separation leads to a double economic burden. This is the case with dividend distributions.

As soon as the bookkeeping for the company has been completed, it's time for the tax return.

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