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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

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