Corporate tax
Swiss corporate tax rates
Switzerland taxes company profit at three levels: federal, cantonal and communal. The federal rate is fixed, but the cantonal and communal layers vary widely, so the combined effective rate a company actually pays depends on where it is based.
There is no single "Swiss corporate tax rate". Profit is taxed by the Confederation, the canton and the municipality, and only the federal layer is uniform across the country. The headline number that matters for planning is the combined effective rate, which folds all three together. For tax year 2026 that figure runs from 11.66% in the city of Lucerne to 20.25% in the city of Bern, and the unweighted average of the 26 cantonal capitals is 14.10%.
This guide gives the short answer up top, then explains how the three layers fit together, why the effective federal rate is 7.83% rather than 8.5%, and how the combined rate varies canton by canton. It also covers the OECD Pillar Two minimum tax, the TRAF reform that abolished the old holding regimes, and the participation exemption. It is the pillar of our tax series; the detailed mechanics of withholding, dividends, the participation exemption and treaty relief sit in the linked child guides. Cantonal rates reprice each January, and the figures here are the 2026 values.
By the numbers
The figures that anchor this topic.
8.5%
FEDERAL CIT · STATUTORY
11.71%
ZUG COMBINED ETR · 2026
14.10%
AVERAGE OF 26 CAPITALS · 2026
EUR 750m
PILLAR TWO THRESHOLD · MNE
The short answer
Swiss corporate tax at a glance.
A company resident in Switzerland pays a flat federal direct tax of 8.5% on profit, which works out to 7.83% on a pre-tax basis, plus a cantonal and communal tax that depends entirely on where it is registered. Put the three layers together and the combined effective rate for 2026 ranges from 11.66% in the cheapest cantonal capital to 20.25% in the most expensive, with an unweighted average of 14.10% across the 26 capitals.
For a foreign founder the practical takeaway is simple: an AG or a GmbH is taxed identically, and the canton you choose is the single largest lever on the bill. In 2026 the city of Lucerne is lowest at 11.66%, with the city of Zug 0.05 points higher at 11.71%; the highest is the city of Bern at 20.25%. Bern's rate is 1.74 times Lucerne's. Cantonal rates move with each fiscal year and differ between municipalities, so the planning figure is the current-year rate for the exact municipality where the company will be registered.
The structure
How the three-layer system works.
A Swiss company's profit is taxed three times over, by three different authorities. The Confederation levies a flat federal direct tax that is the same everywhere. The canton levies its own profit tax at a rate it sets itself, and this is where almost all of the variation comes from. The municipality then applies a communal multiplier (the Steuerfuss) to the cantonal base, which is why two companies in the same canton can pay slightly different amounts depending on their town.
There are 26 cantons and thousands of municipalities, each with the power to set its own rate. When people quote a single percentage for a location, they almost always mean the combined effective rate: federal plus cantonal plus communal, expressed as a share of pre-tax profit. That is the number to use when comparing cantons, and the one this guide tabulates below.
Federal layer
Why the effective federal rate is 7.83%, not 8.5%.
The federal direct tax on company profit is a flat 8.5% under the Federal Direct Tax Act (DBG). The subtlety is the base: the 8.5% is charged on net profit after tax, because the tax itself is a deductible expense. Recalculated on a pre-tax basis, that tax-on-tax deductibility brings the effective federal rate down to 7.83%. This is the single most confused fact about Swiss corporate tax, and it is worth getting right before comparing cantons.
The federal rate is the same in every canton and does not change by municipality. There is no progressive bracket for companies, so a small startup and a large corporate pay the same rate on each franc of profit. For a Swiss-resident company the base is worldwide profit; for a branch or a non-resident company it is Swiss-source profit only.
Three numbers
Statutory, effective and combined rates.
Three different rates circulate in writing about Swiss tax, and conflating them is the usual source of error. The statutory rate is the headline legal rate before any adjustment: federal 8.5%, with each canton setting its own statutory cantonal figure. The effective rate is the actual burden once the tax-on-tax deduction is applied, which is how 8.5% becomes 7.83% at federal level.
The combined effective rate is the one a founder should plan around. It adds the federal, cantonal and communal layers together and expresses the total as a percentage of pre-tax profit. When this guide says Zug is 11.71% or Zurich 19.47%, it means the combined effective rate in the cantonal capital on CHF 1 million of profit before tax. That basis is held constant throughout the comparison below so the cantons are genuinely like for like.
By canton
Corporate tax rate by canton: 2026 comparison.
The figures below are the combined federal, cantonal and communal effective rates in each cantonal capital for tax year 2026, on CHF 1 million of profit before tax, as computed by the ESTV tax calculator, lowest to highest. Outside the capitals the rate can be lower: in 2026 Wollerau (Schwyz) is 11.60% and Meggen (Lucerne) 10.94%. Rates also move from year to year: for 2025 Ticino cut its rate by 3.27 points (from 19.32% to 16.05%) and Basel-Landschaft by 2.45 points (from 15.89% to 13.44%).
- Lucerne: 11.66%, the lowest cantonal capital in 2026.
- Zug: 11.71%, the best-known low-tax canton for holdings, crypto and headquarters, down from 11.85% in 2025.
- Nidwalden: 11.97%, a low-tax small canton that is often overlooked; Schaffhausen: 12.02%.
- Glarus: 12.50%; Uri: 12.64%; Appenzell Innerrhoden: 12.66%; Obwalden: 12.74%.
- Appenzell Ausserrhoden: 13.03%; Basel-Stadt: 13.04%, the pharma and chemical cluster, where a higher rate now applies to very large profits (13.68% on CHF 100 million in 2026).
- Thurgau: 13.18%; Schwyz: 13.30%; Basel-Landschaft: 13.44%; Neuchâtel: 13.57%; Fribourg: 13.87%.
- Vaud: 14.00%; St. Gallen: 14.29%; Geneva: 14.70%; Aargau: 14.71%; Graubünden: 14.77%.
- Solothurn: 15.45%; Valais: 15.65%; Jura: 15.80%; Ticino: 16.05%.
- Zurich: 19.47%, high for an economic powerhouse.
- Bern: 20.25%, the highest in the country.
Older pages still quote superseded figures: Geneva has been 14.70% since 2024, not the 14.00% that applied in 2023, and Zurich is 19.47% for 2026, down from 19.61% in 2025. The spread runs from 11.66% to 20.25%, and the unweighted average of the 26 capitals is 14.10%. Our wider canton comparison sets out the trade-offs beyond the headline rate, including talent, banking and registry speed.
Spotlight
Zug, Zurich and Geneva.
Three cantons account for most foreign-founder enquiries, and they sit at very different points on the scale. Zug, at 11.71% combined effective in 2026, is one of the two lowest cantons in Switzerland, 0.05 points above Lucerne, and the natural home for holdings, crypto ventures and regional headquarters; the detail sits on our Zug page. Geneva, at 14.70%, moved up from 14.00% in 2024 and offers an international and finance ecosystem that is covered on our Geneva page.
Zurich, at 19.47%, is the highest of the three, 7.76 points above Zug and 4.77 points above Geneva and high relative to its economic weight, but it buys access to the deepest talent pool, the largest banking market and the busiest commercial registry in the country; weigh that on our Zurich page. The point of the spotlight is that the cheapest canton is not automatically the right one. The rate is one input, and for many operating companies proximity to clients, banks and staff outranks a two-point saving on profit tax.
Pillar Two
The OECD 15% global minimum tax: does it affect you?
Because several Swiss cantons tax below 15%, the OECD Pillar Two global minimum tax (the GloBE rules) has a direct effect here. Switzerland implements it through a Federal Council ordinance, backed by a 2023 referendum that approved the enabling constitutional article. A domestic top-up tax (the Qualified Domestic Minimum Top-up Tax) applied from 1 January 2024, with the income inclusion rule following for fiscal years from 2025. The undertaxed-profits rule (UTPR) is not in force: the ordinance defers it to a later date that the Federal Council has not yet set (MindStV art. 40 para. 2).
The decision for most readers is straightforward: Pillar Two only bites for large multinational groups with consolidated annual revenue of at least EUR 750 million. If your group is below that threshold, which the vast majority of founders and SMEs are, you continue to pay the ordinary cantonal effective rate and nothing changes. For in-scope groups, if the effective rate in a Swiss canton falls below 15%, a top-up is collected to reach 15% and Switzerland keeps that revenue domestically. Cantons have also adjusted their own tariffs at the top end: Basel-Stadt taxes CHF 100 million of profit at 13.68% in 2026, against 13.04% on CHF 1 million, while staying attractive for everyone below the threshold.
Reform
What replaced the holding company tax privilege.
Until 2020, Switzerland offered special cantonal regimes that taxed holding, domicile and mixed companies very lightly. International pressure ended them. The Federal Act on Tax Reform and AHV Financing (TRAF, the successor to the rejected STAF proposal) came into force on 1 January 2020 and abolished those regimes for every canton. Any advice that still relies on the old "holding privilege" is obsolete.
In their place, TRAF introduced internationally accepted measures available in all 26 cantons: a patent box that can exempt a large share of qualifying intellectual-property income at cantonal level, an optional research-and-development super-deduction, and, in high-tax cantons, a notional interest deduction. A cantonal relief cap limits the cumulative benefit of these instruments to 70% of taxable profit, so the floor is real. Many cantons cut their ordinary rates to stay competitive once the special regimes disappeared, which is part of why the comparison above is as low as it is.
Participation relief
The participation exemption for holding structures.
Switzerland protects against the double taxation of corporate groups through the participation exemption (Beteiligungsabzug). Where a company holds a qualifying stake in another company, dividends received and capital gains on that stake are effectively relieved through a proportional reduction of the tax due. It is the modern substitute for the abolished holding privilege, and it is what makes Switzerland efficient for group structures.
The thresholds, in force since the 2020 reform, are ownership of at least 10% of capital, or at least 10% of profit-and-reserve rights, or a holding with a fair market value of at least CHF 1,000,000. For capital gains an additional minimum holding period of one year applies. The mechanics are covered in depth in our participation exemption guide, and the structuring side on our Swiss holding company page.
Other charges
Other company taxes: capital tax and withholding tax.
Profit tax is not the only levy on a Swiss company. Cantons charge an annual capital tax on equity. On CHF 10 million of taxable equity in the cantonal capital, the 2026 charge runs from 0.001% in Uri and Obwalden to 0.5% in Neuchâtel and Valais; Zug charges 0.068%. Several cantons, including Geneva, Vaud, Bern, Fribourg and Aargau, credit the profit tax against the capital tax, so a profitable company there owes little or no capital tax; Zurich and Zug do not. Minimum capital and the capital-tax base for an AG or GmbH can be estimated with our capital requirements calculator.
Separately, Switzerland levies a federal withholding tax of 35% on dividends a company distributes. It is a security mechanism, not a final cost for compliant taxpayers: Swiss residents reclaim it in full through their tax return, and non-residents reduce it under a double tax treaty, commonly to 0%, 5%, 10% or 15%. The refund and notification mechanics are in our withholding tax guide, the shareholder side in our dividend taxation guide, and the treaty network in our double tax treaties guide.
Entity choice
AG vs GmbH: same corporate tax, different capital.
A common founder misconception is that an AG and a GmbH are taxed differently. They are not. Both are capital companies (Kapitalgesellschaften), and both are subject to exactly the same corporate income tax on profit, at the same federal, cantonal and communal rates. Choosing one form over the other has no effect on the tax rate at all.
The real difference is the minimum share capital: an AG requires CHF 100,000 (of which at least CHF 50,000 must be paid in), while a GmbH requires CHF 20,000, fully paid. That, plus governance and the visibility of ownership, is what usually drives the decision, not tax. Our capital requirements calculator sets the two side by side.
A related point
A note on personal income tax for founders.
Corporate tax and personal income tax are separate systems with separate rates. Where corporate profit tax is flat at federal level, cantonal personal income tax is progressive and generally higher at the margin, so the two should never be compared directly. For an owner-manager, the live question is usually how to split remuneration between salary and dividend, since each is taxed on a different path.
That trade-off is its own topic and turns on the canton, the dividend privilege for qualifying shareholdings, and social-security contributions. We keep it brief here on purpose; the full treatment is in our personal income tax guide and, for the distribution side, the dividend taxation guide.
The close
Choosing a canton and getting a tax ruling.
The combined effective rate is the single biggest tax variable in choosing where to incorporate, but it is not the only one. A canton two points cheaper on profit tax may be further from your talent pool, your bank or your clients, and those costs can outweigh the saving. The disciplined approach is to shortlist on effective rate, weigh the non-tax factors, and plan on the figure for the specific municipality rather than the cantonal capital. If you are starting from scratch, our guide to starting a business in Switzerland sequences the whole process.
Where the treatment of a planned structure is material, a pre-clearance via an advance tax ruling turns the estimate into a binding position from the cantonal administration before you commit. When you are ready to incorporate, our company formation service handles the AG or GmbH setup in the canton you choose. From here, the child guides go deeper on withholding, dividends, the participation exemption and the treaty network; for a cross-border structure, start with the canton choice and the treaty position together.
FAQ
Frequently asked questions
What is the corporate tax rate in Switzerland?
Federal direct tax is 8.5% statutory (7.83% effective) plus cantonal and communal tax. For 2026 the combined effective rate in the cantonal capitals runs from 11.66% (Lucerne) to 20.25% (Bern), with an unweighted average of 14.10% across the 26 capitals.
Which Swiss canton has the lowest corporate tax?
In 2026 the city of Lucerne is lowest at 11.66% combined effective, with the city of Zug 0.05 points higher at 11.71% and Stans (Nidwalden) at 11.97%. Rates reprice each year and vary by municipality, so the ranking is a 2026 ranking of the cantonal capitals.
Why is the effective federal rate 7.83% and not 8.5%?
The federal direct tax of 8.5% is charged on net profit after tax, because the tax itself is a deductible expense. Recalculated on a pre-tax basis, that tax-on-tax deductibility brings the effective burden down to 7.83%.
How is Swiss corporate tax calculated?
Three layers (federal, cantonal and communal) apply to the same net profit. The federal layer is fixed everywhere, while the canton and commune of registration drive most of the variation in the combined effective rate.
Does the OECD 15% minimum tax affect my company?
Only if your group has consolidated annual revenue of at least EUR 750 million. Smaller companies keep their ordinary cantonal rate. For in-scope groups, Switzerland tops up the rate to 15% where a canton taxes below it. The undertaxed-profits rule (UTPR) is not yet in force.
What is the corporate tax rate in Zug, Zurich and Geneva?
Zug 11.71%, Geneva 14.70% and Zurich 19.47% combined effective for 2026. Each figure is the combined federal, cantonal and communal rate in the cantonal capital on CHF 1 million of profit before tax; other municipalities in the same canton can be lower or higher.
Is there still a Swiss holding company tax privilege?
No. The special cantonal holding, domicile and mixed company regimes were abolished by the TRAF reform with effect from 1 January 2020. Holdings now rely on the ordinary rules together with the participation exemption and the patent box.
What is the participation exemption?
Relief on qualifying dividends and capital gains where the holding is at least 10% of capital, at least 10% of profit-and-reserve rights, or has a fair market value of at least CHF 1,000,000. For capital gains, a minimum holding period of one year also applies.
What other company taxes apply?
A cantonal capital tax on company equity at low rates, and a federal withholding tax of 35% on dividends that is reclaimed by residents and reduced by treaty for non-residents. Operating companies also register for VAT at 8.1% once worldwide taxable turnover reaches CHF 100,000.
Is Switzerland a tax haven for companies?
No. After the TRAF reform and OECD Pillar Two, special low-tax regimes are gone. Rates are ordinary, transparent and competitive rather than nil, and large groups face a 15% minimum.
How much tax does a GmbH or AG pay?
The same. Both are capital companies taxed identically on profit at the federal, cantonal and communal rates. Only the minimum share capital differs: AG CHF 100,000 and GmbH CHF 20,000.
What is the capital tax in Switzerland?
A cantonal-only tax on company equity. On CHF 10 million of equity in the cantonal capital it runs from 0.001% (Uri, Obwalden) to 0.5% (Neuchâtel, Valais) in 2026, with Zug at 0.068%. Cantons such as Geneva, Vaud and Bern credit the profit tax against it; Zurich and Zug do not.
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