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Taxation rates Switzerland stays attractive for companies and top earners

A picture of Stans in the canton Nidwalden

Stans, Nidwalden. The canton offers the lowest corporation tax (10.1%) in Switzerland, and takes second place in the global ranking.

(Keystone)

Switzerland remains an attractive tax destination for both companies and top earners in 2017, according to a survey of major global business locations published on Wednesday. But it warned planned US tax reform will increase competition.

The BAK taxation indexexternal link, published by the BAK Basel economic research group, includes countries, Swiss cantons and cities around the world. Hong Kong comes top of the competitiveness index for corporation tax (9.9%), followed by Nidwalden (10.1%), the canton with the lowest corporation tax in Switzerland.

Other Swiss cantons with low business tax were Appenzell (10.3%), Lucerne (10.3%) and Obwalden (10.9%.) Even Geneva, the canton with the highest corporate tax rate in Switzerland (21.4%), remained below the global average by eight percentage points.

New York found itself at the bottom of the ranking. The city taxed businesses at 49.8% - more than any other international economic centre.

All in all, the tax load remained stable both in Switzerland and internationally, with figures virtually unchanged from the last report in 2015.

BAK was optimistic about the tax outlook for Switzerland, but warned of a “calm before the storm”, saying the planned tax reform in the US will lead to fiercer competition, also putting Switzerland’s neighbours like France and Germany under increasing pressure.

The report also said that planned Swiss tax reform should help to stabilise the system. The reforms are meant to replace a corporate tax reform rejected by voters last year.

+ Read more about tax reform in Switzerland

 Advantage for highly skilled staff

Switzerland’s taxation of highly skilled workers was also comparatively low. The Zug canton was ranked in fourth place with a rate of 23%. The canton of Neuchatel had the highest rate in Switzerland (37.7%), but remained slightly below the international average of 38.4 %.

The index of highly qualified workers was calculated on a single childless person on a total income of 100,000 Euro (CHF 117,445). Such a person paid the least amount of tax in cantons Zug, Obwalden und Uri.

The taxation of skilled workers in Switzerland rose by 0.2 percent while the international average remained the same.

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