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. As of 2026 that figure runs from roughly 11.8% in the lowest cantons to around 20.5% in the highest, with a national average near 14.4%.
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. Figures are verified for 2026 and re-checked each January, because cantonal rates reprice.
By the numbers
The figures that anchor this topic.
8.5%
FEDERAL CIT · STATUTORY
~11.8%
ZUG COMBINED ETR · 2026
~14.4%
SWISS AVERAGE ETR · 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 about 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 ranges from roughly 11.8% in the cheapest cantons to about 20.5% in the most expensive, with a Swiss average near 14.4% as of 2026.
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. The lowest-tax canton is Zug at around 11.8%; the highest is Bern at around 20.5%. These figures are verified for 2026, but cantonal rates move with each fiscal year, so confirm the current-year number for the exact municipality before relying on it.
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 around 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 about 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 around 11.8% or Zurich around 19.6%, it means the combined effective rate at the cantonal main city. 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 combine the federal, cantonal and communal layers at each canton's main city, lowest to highest. For non-capital municipalities the rate can differ by roughly one percentage point either way. These are 2026 combined effective rates and they move: Ticino cut its rate by more than three points for 2025, and Basel-Land by close to two and a half, so always confirm the current year before relying on a number. Several small-canton figures are shown with "around" because their precise rate was not confirmed against the federal tax administration in this pass.
- Appenzell Innerrhoden: around 11.5%, the lowest headline rate nationally.
- Zug: around 11.8%, the best-known low-tax canton for holdings, crypto and headquarters.
- Nidwalden: around 11.9%, a low-tax small canton that is often overlooked.
- Lucerne: around 12.3%; Glarus: around 12.4%; Uri: around 12.6%; Obwalden: around 12.7%.
- Basel-Stadt: around 13.0% to 14.5%, the pharma and chemical cluster, rising for large groups from 2026.
- Schwyz: around 14.0%, with some municipalities such as Freienbach lower.
- St. Gallen: around 14.3%; Fribourg, Thurgau, Graubünden, Neuchâtel: roughly 13% to 14%.
- Geneva: around 14.7%; Vaud: around 14.7%.
- Aargau: around 15.1%; Solothurn: around 15.3%; Jura: around 16.0%; Valais: around 17.1%.
- Zurich: around 19.6%, high for an economic powerhouse.
- Bern: around 20.5%, the highest in the country.
One word of caution on blog figures: Geneva is around 14.7%, not the 13.99% that older pages still quote, and Zurich is around 19.6%, not 19.7%. The practical spread is roughly 11.8% to 20.5%, with a Swiss average near 14.4%. 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 around 11.8% combined effective, is the lowest of the well-known cantons and the natural home for holdings, crypto ventures and regional headquarters; the detail sits on our Zug page. Geneva, at around 14.7%, raised its rate from 14% partly in response to the global minimum tax, and offers an international and finance ecosystem that is covered on our Geneva page.
Zurich, at around 19.6%, is the highest of the three 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 has been more cautious in its timing, so we do not state a firm date for it; verify the current position before relying on it.
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. This is why some low-tax cantons (Geneva, Vaud, Basel-Stadt) have nudged ordinary rates upward for large groups, 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, at low rates that range roughly from 0.001% to 0.5% of equity depending on canton; Zug is around 0.07% effective, and some cantons such as Zurich and Geneva allow the capital tax to be offset against profit tax. 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 confirm 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 (about 7.83% effective) plus cantonal and communal tax. The combined effective rate is about 11.8% to 20.5% depending on canton, with a Swiss average of about 14.4% as of 2026.
Which Swiss canton has the lowest corporate tax?
Zug, at about 11.8% combined effective as of 2026. Appenzell Innerrhoden and Nidwalden are comparable or marginally lower at the headline level. Because rates reprice each year and vary by municipality, confirm the ranking for the current year.
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 about 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, and several low-tax cantons have nudged rates up for those groups.
What is the corporate tax rate in Zug, Zurich and Geneva?
Roughly Zug 11.8%, Geneva 14.7% and Zurich 19.6% combined effective as of 2026. Each figure is the combined federal, cantonal and communal rate at the cantonal main city and can differ by about one point in other municipalities.
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, roughly 0.001% to 0.5% depending on canton. Some cantons such as Zurich and Geneva allow it to be offset against corporate income tax.
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