With the new year several corporate tax law adjustments – both at national and cantonal level – enter into force. Most relate to the implementation of the Federal Act on Tax Reform and AHV Financing (TRAF, see blog article). In Zug, the cantonal tax law will also undergo changes that were agreed upon as part of the 2019 austerity package.
The core element of the tax reform is the abolition of tax privileges for status companies where regimes no longer meet international standards. All companies will now be taxed according to the same rules. In order to prevent tax shortfalls and to remain an attractive location internationally, the canton of Zug is reducing the profit tax rate and creating relief measures for companies.
With a new effective corporate income tax rate of 11.91% (cantonal capital), the canton of Zug will secure its leading position in a nationwide comparison (previously: 14.35%). In addition, profits from patents and comparable rights are included in the tax base at only 10% and research and development expenses can be increased by 50% for the calculation of the taxable profit. In order to facilitate the transition to ordinary taxation for the former status companies, the canton of Zug provides transitional measures with regard to hidden reserves (disclosure solution or special tax rate solution).
An overview of the forthcoming changes in German and English, together with the current version of the tax law of the canton of Zug in German (including ordinance), can be downloaded here in KPMG's own publication "Tax Law of the Canton of Zug". If you would prefer a paper copy, please let us know at email@example.com.