What is Gewinnsteuer?
Gewinnsteuer is Switzerland's corporate profit tax. At the federal level, the direct federal tax (direkte Bundessteuer) is levied at a flat rate of 8.5% on profit after tax, which equates to an effective rate of approximately 7.83% on pre-tax profit. Cantons levy their own Gewinnsteuer on top, meaning the combined federal and cantonal effective rate varies by canton.
Current Rate (2025)
Federal: 8.5% on profit after tax (effective ~7.83% pre-tax). Combined federal + cantonal: typically 11.9% to 21.0% depending on canton.
Example
A Zug GmbH with CHF 500,000 pre-tax profit pays federal Gewinnsteuer of approximately CHF 39,150 (7.83% effective) plus cantonal tax, giving a combined effective rate of around 11.9% — one of the lowest in Switzerland.
How Gewinnsteuer works in Switzerland
Gewinnsteuer is the cornerstone of Swiss corporate taxation and operates at three levels: federal, cantonal, and communal. The structure is unique internationally because the federal rate is expressed as a percentage of profit after tax, not before tax.\n\n**Federal rate mechanics**\nThe direct federal tax (DBSt/IFD) is levied at 8.5% on taxable profit after the tax itself has been deducted. This circular calculation means the effective rate on pre-tax profit is: 8.5% / (1 + 8.5%) = 7.834%. For a company with CHF 1,000,000 pre-tax profit, federal Gewinnsteuer = CHF 78,341. After deducting this, profit after federal tax = CHF 921,659, and 8.5% of that = CHF 78,341. The math checks out.\n\n**Cantonal variation**\nEvery Swiss canton sets its own Gewinnsteuer rate. Historically, cantons competed to attract business through low rates. As of 2025, effective combined rates (federal + cantonal + communal) range from approximately:\n- Zug: 11.9%\n- Nidwalden: 12.0%\n- Lucerne: 12.2%\n- Appenzell Innerrhoden: 12.7%\n- Geneva: 13.99%\n- Zurich: 19.7%\n- Berne: 21.0%\nThe canton alone does not determine your rate — the commune (Gemeinde) within the canton adds its own multiplier on top of the cantonal rate.\n\n**Taxable profit calculation**\nSwitzerland uses the principle of Massgeblichkeit (authoritative commercial accounts): taxable profit closely follows the statutory accounts prepared under Swiss GAAP (Swiss CO / OR) or IFRS for larger entities. Key non-deductible items include: private use of company assets, excessive related-party payments, non-business expenses, and voluntary impairments not recognised for tax. Depreciation follows fiscal tables issued by the ESTV (Swiss Federal Tax Administration).\n\n**Minimum taxation under Pillar Two**\nSwitzerland introduced a constitutional amendment in November 2023 to enable OECD Pillar Two minimum taxation. From 1 January 2024, a qualified domestic minimum top-up tax (QDMTT) applies to Swiss entities of multinational groups with global revenues exceeding EUR 750 million. This ensures an effective minimum rate of 15% at the group level, overriding the historically low cantonal rates for affected multinationals. See the separate Pillar Two entry in tax-changes for detail.\n\n**Loss carryforward**\nTax losses can be carried forward for seven years at the federal level. Cantons generally follow the same rule, though some extend the carryforward period. There is no loss carryback in Switzerland.\n\n**Filing and payment**\nCorporate tax returns are filed with the cantonal tax authority (Kantonssteueramt). The federal tax is assessed jointly with the cantonal tax through the same cantonal authority — companies do not deal directly with the ESTV for annual assessments. Provisional invoices are issued during the year; a final assessment is issued after the return is reviewed.
Related terms
Kapitalsteuer is a cantonal tax levied on a company's net equity (paid-in capital plus reserves plus retained earnings). It is a purely cantonal and communal tax — there is no federal Kapitalsteuer. Rates are low (typically 0.001 to 0.5% of net equity annually) but it is a recurring annual cost even in loss years.
A GmbH (Société à responsabilité limitée / Società a responsabilità limitata) is Switzerland's most common private limited company form. It requires a minimum share capital of CHF 20,000, all of which must be paid up on formation. Liability is limited to the company's assets. It is governed by the Swiss Code of Obligations (OR/CO), Articles 772–827.
An AG (Société anonyme / Società anonima) is Switzerland's public limited company form. It requires a minimum share capital of CHF 100,000, of which at least 50% (minimum CHF 50,000) must be paid up on formation. Shares can be issued as registered shares (Namenaktien) or bearer shares (Inhaberaktien, now restricted). Governed by OR Articles 620–763.
Quellensteuer is Switzerland's withholding tax on employment income paid to foreign nationals who do not hold a C permit (permanent residence) or are not Swiss citizens. It is withheld by the employer from salary at source, at cantonal-specific rates, replacing the normal self-assessment income tax obligation for the affected employee.
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