1 Basic framework
1.1 Is there a single tax regime or is the regime multi-level (eg, federal, state, city)?
Swiss taxes are levied at three levels: federal, cantonal and communal.
1.2 What taxes (and rates) apply to corporate entities which are tax resident in your jurisdiction?
The two main taxes regularly levied on Swiss resident corporate entities are income tax and capital tax. While income tax is levied at the three levels, capital tax is levied only by cantons and communes. The applicable rates vary depending on the cantons and communes. Under current law, effective corporate income tax rates vary roughly between 12% and 24%, whereas capital tax rates range from approximately 0.001% to 0.5%. An ongoing corporate tax reform may change the applicable rates (see question 2.1).
Any dividend distribution made by a Swiss company triggers a 35% withholding tax, which can then be claimed back, at least partially. While Swiss resident shareholders can seek a full refund under domestic law, foreign resident shareholders must rely on an applicable double tax treaty, if any. Interest paid to bond holders by a Swiss debtor also triggers Swiss withholding tax.
When a Swiss company is incorporated or when its capital is increased, an issuance stamp duty of 1% is owed if the capital exceeds CHF 1 million. A negotiation stamp duty may also be triggered on the transfer of securities where the Swiss company qualifies as a security dealer.
Depending on their activities, Swiss companies may also be subject to valued added tax - the general rate being 7.7% - if their annual turnover reaches CHF 100,000 (see question 8).
1.3 Is taxation based on revenue, profits, specific trade income, deemed profits or some other tax base?
Corporate income tax is based on net profits and capital tax is calculated on equity (including reserves). Other taxes may rely on other parameters. For instance, the Geneva communal professional tax is computed on several factors, including revenue, rents and number of employees.
1.4 Is there a different treatment based on the nature of the taxable income (eg, gains on assets as opposed to trading income or dividend income)?
Income and gains arising from qualified participations are generally tax exempt (indirect participation exemption regime), provided that certain conditions are met. Dividends are eligible where the participation represents at least 10% of the capital in a company or is worth at least CHF 1 million. As for capital gains, the participation sold must represent at least 10% (the CHF 1 million threshold is not applicable) and must have been held for at least one year.
1.5 Is the regime a worldwide or territorial regime, or a mixture?
It is a worldwide regime which provides for some exemptions, such as for permanent establishments abroad and foreign real estate. Conversely, Swiss permanent establishments of foreign companies are subject to limited tax liability. The same applies to foreign companies owning Swiss real estate.
1.6 Can losses be utilised and/or carried forward for tax purposes, and must these all be intra-jurisdiction (ie, foreign losses cannot be utilised domestically and vice versa)?
Losses may be carried forward for a seven-year period. Losses incurred abroad are generally recognised.
1.7 Is there a concept of beneficial ownership of taxable income or is it only the named or legal owner of the income that is taxed?
The notion of beneficial ownership is particularly relevant when it comes to nominee arrangements. Provided that the latter meet some formal criteria, the beneficial owner - rather than the nominee - shall be liable to pay the taxes pertaining to the property that is subject to the arrangement. The same applies to other situations, such as usufruct. Likewise, where a refund of Swiss withholding tax (eg, levied on dividends) is sought, the tax administration will verify that the applicant qualifies as the beneficial owner of the income on which the tax has been levied.
1.8 Do the rates change...