Corporate taxes

Taxes in Canton Zug

As a general rule, private individuals and legal entities are liable to tax if their business domicile or residence is in Zug. Under certain circumstances there might be an obligation to pay taxes on assets and income in Zug, even if the domicile of the individual or legal entity is outside of Switzerland. In this case it is prudent to call in a relevant double taxation treaty, in order to avoid a double tax burden.

Income and capital tax

All taxes, the direct federal tax, cantonal and municipal taxes, are levied on the income of a corporation. The capital, on however, is subject to cantonal and municipal taxes only.

The tax rates vary according to the type of corporation. One has to distinguish between the operating, the holding, the domicile and the mixed company. The canton Zug offers tax privileges to the later three. Operating companies concerned with trading, manufacturing or service are subject to ordinary taxation in Zug. Tax is payable on:

  1. the taxable net profit
  2. the paid up share or foundation capital
  3. disclosed and taxed hidden reserves

Capital and reserves

  • Profit 0
  • Direct federal tax 8.5%
  • Canton 0.5%
  • Municipality simple tax 4% on profits

up to CHF 100,000.- 6.75% (from 2011: 6.5%) on profit exceeding CHF 100,000.-

Privileged taxation

The tax legislation of the canton Zug provides privileged taxation for particular corporations, depending on their activity.

The Federal Tax Harmonization Law and also the tax law of the canton Zug have provided the granting of tax relief. Decisions regarding tax relief are executed by the government of the canton Zug and it applies to both cantonal and municipal taxes.
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