How competitive are Swiss corporate tax rates in a global comparison? And what’s the role of the different cantonal tax rates in terms of attractiveness within Switzerland? Peter Uebelhart, KPMG’s Head of Tax & Legal, responds to key questions about the tax landscape in Switzerland and internationally.
Switzerland maintains strong links with countries around the world as an import and export partner. With many attractive trading conditions in place or in the pipeline, Switzerland is bucking the global protectionist trend.The number of free trade agreements worldwide has exploded in recent years, especially in the last 10 years.
Germany remains Switzerland’s largest trade partner.
Switzerland and the UK have signed a post-Brexit trade deal to protect their valuable trading relationship.
Switzerland’s most balanced trading relationship is with France, where exports (CHF 17.2 billion) almost match imports (CHF 17.9 billion).
USA is the third most important export (14%) and fourth biggest (9%) import market for Switzerland.
Switzerland’s neighbor to the East is the eighth most important import partner for Switzerland (CHF 7.9 billion in 2017).
Italy is Switzerland's third largest import partner after Germany and UK.
The increase in imports from Asia compared with the previous year is mainly attributable to the United Arab Emirates. This applies in particular to jewellery raw materials.
Switzerland and India enjoy a strong trading relationship: Switzerland is the 11th largest foreign investor in India and India benefits from the Generalized System of Preferences.
In terms of export value, Hong Kong is the world's most important export market for the Swiss watch industry.
Switzerland's free trade agreement with China will take full effect in 2023, as customs duties for the majority of Swiss products will fall to zero.
Figures for 2017, Source: FSO, Swiss Customs Administration - Foreign trade statistics Switzerland
In a global environment of growing protectionism, Switzerland’s message is "welcome – we’re open for business". It’s a strategy that make sense in a country where imports and exports are vital for the health of the economy. KPMG’s Michel Anliker explores the Swiss formula for success and looks to the future of trade and customs in Switzerland.
Attractive tax rates remain a natural strength in Switzerland. With some cantons already preparing for the changes that Switzerland’s new tax law (TRAF) will bring, others are likely to follow soon.
Note: max. effective rate on pre-tax profits for federal/cantonal/municipal taxes in the respective cantonal capital. Corporate income tax figures for AI, GE, GL, SG, JU and NE for 2018. Source: KPMG Switzerland
The traditional offshore domiciles plus Hong Kong and Singapore remain the clear leaders in terms of tax appeal outside of Europe. In a global comparison, Switzerland retains its place in the top third – this year with a lower average tax rate overall thanks mainly to cuts in Basel-Stadt and Vaud.
Note: max. effective rate on pre-tax profits for federal/cantonal/municipal taxes in the respective cantonal capital. Corporate income tax figures for Bermuda and UAE from 2018. Source: KPMG Schweiz, KPMG International: https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corporate-tax-rates-table.html
Income tax rates in Switzerland and internationally are generally stable, with the significant decrease in the canton of Nidwalden a striking exception. Switzerland remains a highly attractive location not just for businesses, but also for individuals.
Note: Max. Individual Income tax rates single, no children, no denomination for the respective capital. Source: KPMG Switzerland | Individual income tax figures for AI, GL, OW, SG and UR from 2018.