Taxes

Self-employed individuals must record investments either directly as expenses or manage them as assets in order to depreciate them. The latter allows for annual depreciation, with the maximum amount being determined at the cantonal level.

Holders of shares or common shares in a GmbH or AG must list these and any distributions in detail in their tax return. Distributions are subject to withholding tax, while participations must be stated in the securities directory.

People with dual residence are subject to taxation in Switzerland and another state; double taxation agreements prevent double taxation. Switzerland has 53 double taxation agreements, of which 46 are active to facilitate economic traffic.

Domiciliary companies in Switzerland are only allowed to engage in administrative activities and are subject to a ban on business operations. They enjoy tax privileges as revenues from abroad are tax-free.

Switzerland levies an emissions charge on equity such as stocks and cooperative shares; exemption limit for incorporations/capital increases at 1 million francs. Abolition of the charge from tax reform temporarily stopped due to federal financial concerns.

Shell companies can be used for legal purposes such as asset protection and business confidentiality or illegal activities such as tax evasion. In Switzerland, especially in Zug, there are still around 50,000 such companies, although the pressure to abolish them is increasing.

When purchasing new real estate, the capital gains tax can be deferred if the proceeds from the sale of an owner-occupied property are reinvested. Conditions such as personal use and a cantonal deadline of usually two years must be met.

Taxpayers with domiciles in different regions use apportionment methods to avoid double taxation. These include inter-municipal, inter-cantonal, and international tax allocations.

Profits can be distributed as wages/dividends or retained for tax-free capital gains. Both strategies affect tax burden and corporate liquidity.