The maximum effective corporate income tax rates range from around 11.54% to 24.41% depending on canton and commune. All 26 cantons apply different tax rates and in most of them the statutory tax rate needs to be multiplied with the communal and/or cantonal coefficients that may vary from tax period to tax period.
Switzerland is known as secrecy Jurisdiction no. 1 and is one of the oldest and most popular tax havens in Europe. All taxes - including corporate income taxes - are deductible when computing the tax basis, hence the effective corporate income tax rates are lower than the rates published in the tax codes. Switzerland is often used as a conduit jurisdiction to Jersey.
Switzerland has special tax incentives for companies who predominantly trade internationally to benefit from the advantageous “mixed-company” status that allows them to be taxed at a rate of just 8,5%. These special Swiss tax incentives for holding, mixed and domiciliary companies have been found to violatate EU State Aid rules.
The canton of Nidwalden introduced a Licence Box rule in 2011 which allows companies located in Nidwalden to benefit from a cantonal tax rate on net license income reduced by 80%.
According to the case law of the Swiss Federal Supreme Court (See below), Article 58 of the Federal Law on Federal Direct Tax of December 14, 1990 and Article 24 of the Federal Law on Harmonization of the Cantonal and Communal Taxes of December 14, 1990 create the necessary legal basis for application of the Arm’s Length Principle. Both articles deal with the taxable basis for corporations. Switzerland relies on the transfer pricing guidelines as a source for the interpretation of the arm’s length principle.