Switzerland – Canton of ZUG

Why Choose ZUG as Domicile of a New Company?

Zug’s attractive tax environment has made a major contribution to the economic prosperity of the canton. This can be attributed not only to the low fees charged for public services, but above also to the competence of the tax authorities and their positive approach to matters of the economy.

In the Canton of Zug, taxpayers are considered as clients not debtors. This efficient, solution-oriented approach creates mutual trust and therefore an open positive partnership, to the benefit of all participants.

Electronic tax declaration
Tax assessment
Tax rates
Tax administration

Tax Benefits

In Switzerland taxes are levied at three different levels, as follows:

Federal Level – direct federal tax levied on income of individuals. On the federal level, the Confederation of Switzerland has its own tax laws applicable to the whole of Switzerland and which therefore apply equally to all cantons

Cantonal Level – Cantonal tax on income and net wealth of individuals.

Municipal Level – municipal taxes as a surcharge on Zug’s basic cantonal tax

Zug is well known for its low taxation levels and is therefore often described as a tax haven.

Depending on your permit and income, you will either be taxed at source or will pay normal income tax at the end of each year. To find out which one applies to you, consult your HR department or contact the local tax authorities.

The standard VAT rate in Switzerland is 8% since January 2011. There is a special rate of 3.8% for accommodation services. There is also a reduced 2.5% rate  for: food, water, agricultural & medical products, newspapers, magazines, books and some cultural services.

Zug Holding Companies
Advantages

Holding companies are companies whose business purpose consists mainly in the continual administration of investments in other companies and which do not conduct an active business in Switzerland.

As a rule, holding companies are not subject to cantonal and municipal income tax and only a reduced tax on capital is levied.

Zug Domicile Companies
Advantages

Domicile companies are companies which carry-out only an administrative, but not a business activity in Switzerland.

In the case of purely domicile companies, earnings from qualifying holdings and other earnings from abroad are not subject to income taxes at cantonal and municipal level.

Furthermore, domicile companies are only subject to reduced tax on capital.

Zug Mixed Companies
Advantages

Mixed companies are companies whose business activity is mainly restricted to abroad and whose business activities in Switzerland play only a subordinate role.

Earnings from qualifying holdings are not subject to income taxes on cantonal and municipal level. Other earnings from abroad are taxed only in a range of a quota between 10%-25%, which is subject to ordinary tax. Furthermore, mixed companies are only subject to a reduced tax on capital.

Comments

Companies in Zug pay a maximum rate of 14.6 per cent this year, according to KPMG. But the canton still faces strong competition from Ireland, which has lured international companies with even lower rates.