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Switzerland: New corporate income tax rate in canton of Zug

Switzerland: New corporate income tax rate in Zug

Several corporate tax law adjustments—both at the federal and cantonal level—are effective 1 January 2020, with most relating to the federal tax reform known as the “Federal Act on Tax Reform and AHV Financing” (TRAF).

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A core element of the federal tax reform provisions is the repeal of tax privileges for “status companies” when the tax regimes no longer meet international standards. All companies are to be taxed according to the same rules. In order to prevent tax revenue shortfalls while positioning Switzerland to continue to be an attractive location for business, the canton of Zug is reducing the profit tax rate and providing tax relief measures for companies.

New tax law in Zug

The new tax law measures in the canton of Zug include:

  • A new effective corporate income tax rate of 11.91% (previously 14.35%) (cantonal capital)
  • Profits from patents and comparable rights to be included in the tax base at only 10% and research and development expenses to be increased by 50% for the calculation of the taxable profit
  • Transitional measures with regard to hidden reserves (pursuant to a disclosure solution or special tax rate solution) in order to facilitate the transition to ordinary taxation for the former status companies


Read a January 2020 report prepared by the KPMG member firm in Switzerland

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

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