As mentioned under ‘Taxation – General aspects’, Swiss companies with special fiscal status still exist and are subject like every Swiss company to well defined legal regulations (company law, fiscal law), but can take advantage of some fiscal accommodations, in full observance of established international rules and existing tax treaties. Tax treaties are, in most cases, applicable, as long as the criteria laid down by the federal government on the use of existing tax treaties without legitimate cause are complied with.
These regimes are, however, undergoing significant changes with the current advantages being replaced (under discussion for instance are a general reduction of the tax rate, the introduction of a patent box and of notional interests on equity and various other measures). The planned fiscal reform CTR III was rejected by Swiss voters in February 2017 and it is now expected that the Swiss Parliament will release a new proposal including some of the measures from the CTR III (please refer to point ‘Taxation – General aspects’).
Regulations are cantonal, the description below can therefore only be an indication. A federal law on the harmonisation of cantonal laws prescribes, however, that the fiscal legislation should be harmonized between the cantons and sets the framework hereof.
The holding privilege is granted when at least 2/3 of the assets are participations or when at least 2/3 of the revenues are derived from participations. The holding is required to hold at least 10% of the share capital of each participation, or alternatively the value of each participation needs to be in excess of CHF 1’000’000.
No commercial or industrial activity is allowed; it is however allowed to have passive economic activity (income from licences, interest income, real properties, trademarks, securities, etc.).
Dividend income is exempted (no minimum tax is required in the country of the dividend paying company), income from passive economic activity is taxed only at federal level (nominal rate 8.5%). Capital gains are not taxed.
Capital tax is due at a reduced rate.
Since January 1, 2001 the following three kinds of companies have been classified as “administrative companies” (Verwaltungsgesellschaft).However, the fiscal treatment remains the same as in the past and depends on the activity of the company.
This company can be used to administer own assets abroad (licences, real property, loans etc.), either directly or as a trustee. Usually it cannot have a commercial activity and should not have its own premises or personnel.
Income tax is only due at federal level. If the assets are held as a trustee, then the taxable income is only made up of the commissions earned, which should be at least 0,2% of the value of the assets.
Capital tax is due at a reduced rate.
The cantons grant domiciliary companies extensive tax privileges. Profits are taxed at a reduced rate, with the condition that the company does not have (direct) business activities in Switzerland. At the Cantonal level, a domiciliary company has no relief on the net income tax. At the Cantonal level, a domiciliary company pays a tax of up to 15% of the regular Cantonal income tax. The domiciliary company may be controlled by either Swiss or foreign nationals.
Auxiliary companies can be used for commercial activities abroad, for the exploitation of immaterial rights, as factoring companies, etc. They can usually have their own premises and personnel.
The effective applicable income tax rate depends on the activity in Switzerland and could be as low as 8%.
The auxiliary status can also be granted to branches of foreign companies.
Service companies can be used for rendering services within a group (marketing, accounting, administrative / technical / commercial / financial coordination). They can have their own premises and personnel. Services can be invoiced to any company of the group, with a mark-up on the costs incurred.