Switzerland

Resident companies are subject to Swiss corporate income tax (CIT) on their taxable profits generated in Switzerland. CIT is levied at the federal, cantonal, and communal levels. Foreign-source income attributable to foreign permanent establishments (PEs) or real estate property located abroad is excluded from the Swiss tax base and only taken into account for rate progression purposes in the cantons that apply progressive tax rates.

Non-resident companies may be subject to Swiss CIT if they (alternatively) have a PE in Switzerland, own real estate property in Switzerland, are partners of a Swiss business, have loan receivables secured by a mortgage on Swiss real estate property, or deal with or act as a broker of Swiss real estate property. Non-resident companies are taxed on their income generated in Switzerland (see the Branch income section).

Federal level

Switzerland levies a direct federal CIT at a flat rate of 8.5% on profit after tax. Accordingly, CIT is deductible for tax purposes and reduces the applicable tax base (i.e. taxable income), resulting in a direct federal CIT rate on profit before tax of approximately 7.83%. At the federal level, no corporate capital tax is levied.

Cantonal/communal levels

In addition to the direct federal CIT, each canton has its own tax law and levies cantonal and communal corporate income and capital taxes at different rates. Therefore, the tax burden of income (and capital) varies from canton to canton. Some cantonal and communal taxes are imposed at progressive rates.

Overall tax rates

As a general rule, the overall approximate range of the maximum CIT rate on profit before tax for federal, cantonal, and communal taxes is between 11.9% and 21.0%, depending on the company’s location of corporate residence at a specific capital of a canton in Switzerland. With the entry into effect of the Federal Act on Tax Reform and AHV (old-age and survivors’ insurance) Financing (TRAF) as of 1 January 2020, the special cantonal tax regimes (e.g. the regimes for holding companies, domicile companies, mixed trading companies) were abolished. At the same time, most cantons reduced or will reduce their CIT rate with a resulting effective tax rate of some 12% to 15% in the majority of the cantons and introduced internationally accepted replacement measures, such as an Organisation for Economic Co-operation and Development (OECD) compliant patent box, a research and development (R&D) super deduction, and other measures.

Netherlands

In general, a Dutch resident company is subject to CIT on its worldwide income. However, certain income can be exempted or excluded from the tax base. Non-resident entities only have a limited tax liability with regard to income from Dutch sources.

Standard corporate income tax (CIT) rate

The standard CIT rate stands at 25.8%. There are two taxable income brackets. A lower rate of 15% applies to the first income bracket of EUR 395,000. The standard rate applies to the excess of the taxable income.

Local income taxes

There are no provincial or municipal corporate income taxes in the Netherlands.

Consult us

Information about setting up a company in Switzerland:

• Stefan Sollberger, financial expert and director of Sollberger KMU Treuhand.

Information about setting up a company in The Netherlands:

• Bob Juchter van Bergen Quast, international lawyer

Sources

• PWC