Taxes for companies
The main indicator of the BAK Taxation Index on taxes for companies is the effective average tax rate (EATR). The resulting tax rate indicates the taxes owed by a profitable company as a percentage of profit. All relevant types of taxes and regulations relevant at a location are considered, which is why the results are particularly meaningful for national and international tax comparisons.
BAK Taxation Index for companies 2023/2024
The Swiss cantons perform excellently in the international ranking when it comes to taxes for companies, and their attractiveness will increase even further with the implementation of the STAF (or TRAF) tax reform from 2020. Some of the leading Swiss cantons are more attractive than Ireland, Singapore and Hong Kong. Even the Swiss canton with the highest tax burden is still well ahead of important competitor locations such as London, Vienna, Milan, Munich and Paris.
BAK Taxation Index for companies 2023 - Minimum and maximum tax burden in the cantons
The Swiss cantons (measured at the cantonal main location) perform excellently in the international ranking when it comes to taxes for companies. If the tax burden in the municipality with the lowest tax burden is used instead of the EATR tax burden in the cantonal main location, the Swiss cantons are even more attractive. Even if the municipality with the highest tax burden is used as a benchmark, the Swiss cantons are well to very well positioned.
BAK Taxation Index for companies over time
The longer-term comparison shows that the Swiss cantons have continuously reduced taxes for companies and have thus been able to hold their own in the increasingly fierce international tax competition. This has been made possible, among other things, because the Swiss cantons have healthy public budgets by international standards.
MethodologyThe main indicator of the BAK Taxation Index on corporate taxes is the effective average tax burden (EATR) from the perspective of a profitable company. The analysis covers all 26 Swiss cantons and important international competitor locations. The index is calculated for a company in the manufacturing sector, which is composed to equal parts of different types of assets (acquired intangible assets, industrial buildings, machinery, financial assets, inventories), is financed through different sources of financing (retained earnings, debt, new equity) and achieves a pre-tax return of 20%. The calculation takes into account the various taxes for companies, the interaction between these taxes, and the main rules used to determine the tax bases (e.g. the rules on depreciation and inventory valuation). The analysis includes all government levels of a location (e.g. for a Swiss canton: federal, cantonal, municipal and parish levels). This allows meaningful national and international comparisons of tax burdens. In contrast, a comparison based solely on statutory tax rates would lead to an incomplete representation of taxes for companies. |
