The tax regime in Switzerland is far less onerous and far less bureaucratic than in most western countries. In fact, the total tax take (federal, cantonal and municipal) only represents around one third of GDP, which is well below the European average. As for the rate of VAT (8.0%), it is one of the lowest in Europe.
This moderate tax regime is definitely one of Switzerland's main advantages when it comes to the establishment of enterprises.
Furthermore, most of the tax levels are set by each canton individually, which gives rise to not inconsiderable differences.
Compared with other cantons, Vaud has a very attractive tax regime. Each year, these advantages convince more and more international companies to add their names to the list of prestigious firms already established in the canton of Vaud such as Nespresso, La Redoute, Starbucks Coffee and Philip Morris.
Taxation of corporate entities
The canton of Vaud is particularly attractive when it comes to the taxation of corporate entities. As a general rule, the aggregate cantonal and federal tax rate on company profits varies between 20.75 and 23.6%, depending on where the company has its registered office. The same approach is applied when calculating taxes on capital, although the rate is well below one percent (between 0.224 and 0.238%) and is only charged at cantonal and communal level.
In addition, the canton of Vaud enjoys a major competitive advantage over other European locations thanks to a large raft of financial and fiscal measures aimed at companies with a view to substantially reducing the levies payable. This policy is intended to make it easier for new companies to become established by allowing better use of the capital available. The fiscal incentives are as follows:
Exemption from cantonal taxes on profits and capital
Newly created companies operating in the priority sectors defined by the canton – life sciences, information and communications technology, microtechnology (precision engineering), agribusiness and environmental technologies – and which have long-term activities in the canton, can take advantage of an exemption from cantonal and municipal taxes on profits and capital, meaning precisely where the taxes are the highest, up to a maximum of 100% for a limited period of ten years.
The same measures can also be applied to enterprises established in the canton that expand or fundamentally modify their activities, and which announce a restructuring plan for major investment in economic terms.
Exemptions due to the nature of the company
Certain types of company can similarly benefit from tax breaks. Specifically, the Vaud tax authorities accord special treatment to holding companies, international service providers and subsidiaries. These beneficial regimes grant the beneficiaries lower tax rates in line with the specific nature of their activities. In some cases, the company might even be exempted from certain taxes at cantonal and municipal level, and possibly also federal level.
For complete information, please refer to the publication opposite.
Taxation of natural persons
Taxation of natural persons is very moderate in Switzerland, enjoying a level that is far lower than the European average. The canton of Vaud has one of the lowest tax rates in western Switzerland for natural persons. It also has a special expenditure-based tax package available for foreign residents who are in paid employment in Switzerland, under which the tax payable is calculated on the basis of the taxpayer's estimated lifestyle, and hence on total outgoings rather than income or assets.
Development economic - State of Vaud (DEV)
Avenue de Gratta-Paille 2
Case postale 19
1000 Lausanne 22
Tel : ++41 21 644 00 60
Fax : ++41 21 644 00 79
E-mail : dev(at)dev.ch