Handbook for Investors. Business location in Switzerland.

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Swiss securities dealers are defined as any persons professionally engaged in buying or selling securities for their own account or for another person, including Swiss banks and other Swiss bank-like institutions. Furthermore, companies holding taxable securities whose book values exceed CHF 10 million and remote members of a Swiss stock exchange with regard to Swiss titles which are quoted on the Swiss stock exchange are considered Swiss securities dealers. 10.6.2 Real estate taxes Capital gains on Swiss immovable property are either subject to a special cantonal real estate gains tax or to ordinary corporate income tax depending on the system that is applied in the canton where the immovable property is located. The right to tax such gains is reserved to the cantons and municipalities. Furthermore, in most cantons the transfer of real estate is subject to a conveyance tax, whereas on the federal level no taxes of such kind are levied. As a general rule, conveyance tax is assessed on the purchase price or the taxable value of the real estate and is typically paid by the purchaser of the real estate. Depending on the canton, the applicable tax rate varies between 1 % and 3 %. 10.7 Double taxation treaty network. To minimize the effect of double taxation in Switzerland and abroad, Switzerland has concluded tax treaties covering direct income taxes with all important industrial countries and many other countries. Most of these treaties are patterned on the principles of the OECD model convention, which defines where the income or the assets are to be taxed and also describes the method for the elimination of double taxation. Switzerland adopted the tax exemption method, exempting income allocable to a foreign country from taxation in Switzerland. Such income and net worth is only considered for calculating the applicable tax rate (progression). On certain income streams (dividend, interest and license fees) both states, the state in which the income is earned and the state of the recipient’s residence, are entitled to tax them. However, the double tax treaty limits the right of taxation of the source state, and the source tax can be credited against the tax levied in the recipient’s state of residence. To date, more than 70 tax treaties are in effect, plus also the EU bilateral agreements (since July 1, 2005). As Swiss tax treaties are treated as international conventions, they generally supersede federal as well as cantonal/municipal tax rules. Moreover, about half of the cantons levy a special wealth tax on real estate. This tax is due every year in addition to the general wealth tax. The tax is levied at the place where the property is situated and is assessed on the market or taxable value of the real estate without allowing for deduction of debts. The tax rates applied range between 0.03 % and 0.3 %. Swiss double tax treaties apply to persons (individuals or companies) who are resident in one or both of the contracting states. As already mentioned in section 10.3.5, Swiss residents applying for lump-sum taxation generally qualify for treaty relief as well. However, some treaties provide for special conditions to be met in order to benefit from the treaty applied. Apart from the tax treaties covering direct income taxes, Switzerland also concluded a few tax treaties in the area of inheritance and estate tax. Switzerland has not negotiated any double tax treaties concerning gift taxes so far. Furthermore, there are some special treaties relating to cross-border commuters, taxation of international air and transport, and the tax situation of international organizations and their staff. 100 Handbook for Investors 2010
10.8 Transfer pricing rules. According to Swiss tax law, transactions between group companies must be at arm’s length. Switzerland does not have separate transfer pricing legislation and does not plan to enact such legislation in the near future. Instead, the Swiss tax authorities follow the transfer pricing guidelines of the OECD to determine if a transaction between related parties is at arm’s length. In Switzerland, no specific documentation requirements for transfer pricing purposes must be observed. A company doing business in Switzerland should however have the appropriate documentation on file verifying the arm’s-length nature of transactions with related parties. Your contacts in Switzerland Georges Meyer, Tax Partner Leader US Desk PricewaterhouseCoopers Ltd Birchstrasse 160 CH-8050 Zurich Direct Phone: +41 58 739 43 88 E-mail: US-Desk@ch.pwc.com Samuel Bussmann, Tax Senior Manager Senior Manager US Desk PricewaterhouseCoopers Ltd 300 Madison Avenue USA-NY 10017 Direct Phone: +1 646 471 5152 E-mail: US-Desk@ch.pwc.com Federal Department of Finance FDF www.efd.admin.ch Languages: German, English, French, Italian Handbook for Investors 2010 101
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Handbook for Investors. Business lo
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Welcome. Dear Reader, By choosing t
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Table of contents. Advantages offer
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10.3.4 Cross-border commuters .....
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9. Excellent educational institutio
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1.2 Climate. Switzerland’s climat
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Despite the close proximity of diff
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1.7.2 Direct investments and Swiss
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1.8 Switzerland in figures. Fig. 7:
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Fig. 9: Industry structure, percent
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2.2.2 Direct investments In additio
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The medical technology industry is
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Dachorganisation Informatik- und Te
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3. Economic framework. Free competi
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Customs information www.zoll.admin.
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Swiss Federal Institute of Intellec
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In the main, Swiss product liabilit
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3.5.2 Environment Swiss environment
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4.2 Political and economic cooperat
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4.3 The euro. Even though the offic
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The following criteria are crucial
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Liability Minimum capital Consultin
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Sole proprietorship and general par
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5.4.2 Entry in the commercial regis
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