Taxes and Accounting in Switzerland

Overview by Globlatrade.net:

Accounting Rules

Tax Year
The fiscal year begins on January 1st and ends on December 31st of the same year.
Accounting Standards
The Swiss Code of Obligations does not contain any provisions on the accounting standard according to which a consolidated financial statement must be prepared. Only the IPO laws of the SWX Swiss Exchange require that an accepted accounting standard based on the "true and fair view" principle be used (such as Swiss GAAP FER, IFRS or US GAAP). However Swiss GAAP FER accounting standards are used by the national groups and small and mid-sized organizations. In addition, sector-specific standards exist to regulate accounting provisions for pension funds, insurance companies and non-profit organizations. Companies listed on the main board of the SIX Swiss Exchange and listed companies domiciled in the EU have to prepare their consolidated financial statements in accordance with IFRS, thus conforming to the global trend towards IFRS financial reporting.
Accounting Regulation Bodies
Treuhand-Kammer
Accounting Reports
Any company that is registered with the register of commerce in Switzerland needs to maintain a book-of-account and is obliged to follow the general commercial accounting principles as set forth in the Swiss Code of Obligations. Moreover it is compulsory to maintain the balance sheet, the profit-and-loss statement and the inventory in Swiss francs, but this requirement does not apply to the day-to-day bookkeeping.
Publication Requirements
As per the law, an annual financial statement with its associated income statement, balance sheet and notes must be prepared. It must be made in a manner such that company's assets and earnings can be valued as accurately as possible.
Professional Accountancy Bodies
Treuhand-Kammer , Swiss Institute of Certified Accountants and Tax Consultants (in english)
Certification and Auditing
Companies have to seek a statutory auditor to conduct an annual audit of the financial health of their organization. You can contactn the Swiss Federal Audit Office.
Accounting News
Accounting news in Switzerland and  Central Europe by einnews.com

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Tax Rates

Consumption Taxes

Nature of the Tax
Value Added Tax (VAT)
Tax Rate
8%
Reduced Tax Rate
2.5% for certain goods and services, which include: foodstuffs; agricultural products (meats, cereals, plants, seed and flowers); medicine and drugs; newspapers; magazines; books and other printed materials; and radio and TV services.
3.8% on hotel and lodging industry (will be 3.8% from 2011).
Most banking services are exempt of VAT.
Other Consumption Taxes
Federal and cantonal governments levy excise taxes on a number products.
 
Find Tax Professionals in Switzerland on GlobalTrade.net.
 

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Corporate Taxes

Company Tax
A federal tax rate of 8.5% is levied on net income. Since income and capital taxes are deductible in determining taxable income, the effective rate tax rate is 7.83%. The cantonal / communal tax rates range between 10.7% and 24.5% depending on the canton and municipality of residency. For more details, consult Taxation.ch.
Tax Rate For Foreign Companies
Resident companies are subject to:
- Federal corporate income tax;
- cantonal/municipal corporate income taxes
- the cantonal/municipal net worth taxes.
Non-resident companies deriving income from certain Swiss sources may be subject to withholding taxes or be liable to corporate income tax in respect of such income.
Main Allowable Deductions and Tax Credit
Business expenses, depreciation, and taxes paid at federal, cantonal or municipal levels are subjected to deductions. Also, indirect taxes such as import duties and foreign taxes (not covered under unilateral or tax-treaty relief provisions) are deductible. Moreover, losses may be carried forward for seven years.
Other Corporate Taxes
Stamp duties (1%), Land registration fees, etc.

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Individual Taxes

Tax Rate

Individual income tax by Canton Rate includes Federal Tax, Cantonal Tax, Communal Tax and Church Tax
Jura 42.28%
Basel-Land 40.78%
Geneva 40.68%
Bern 40.44%
Vaud 39.40%
Zurich 39.18%
Ticino 39.11%
Basel-Stadt 37.58%
Neuchâtel 37.35%
Valais 34.97%
Solothurn 34.84%
Fribourg 34.54%
Aargau 34.20%
Thurgau 33.92%
Glarus 33.83%
St. Gallen 32.62%
Graubünden 32.27%
Schaffhausen 31.88%
Luzern 31.19%
Appenzell A.Rh 30.17%
Nidwalden 26.13%
Appenzell I.Rh 30.17%
Uri 25.43%
Zug 23.82%
Schwyz 23.15%
Obwalden 22.42%
Allowable Deductions and Tax Credit
Personal deductions vary according to the status of each person (single person, bridegrooms, dependant child, etc.).
Medical care and insurance allowances are often deductible.
Special Expatriate Tax Regime
Expatriates working in Switzerland pay the same tax rate as Swiss nationals. However certain special employment costs may be deducted from the tax base.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of Double Tax Treaties signed by Switzerland
Withholding Taxes
Dividends: 35% ; Interest: 35% ; Royalties: 0%.

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Sources of Fiscal Information

Tax Authorities
FTA
Other Domestic Resources
Taxation.ch website.
The Swiss tax system described by the Swiss Official Web Portal ch.ch (in english).

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Find more on GlobalTrade.net about Taxes and Accounting in Switzerland.
 

Intellectual Property

National Organizations
The body in charge with the protection of intellectual property in Switzerland is the Federal Institute of the Intellectual property (IGE).
Regional Organizations
Convention on Grants of European Patents (European Patent Convention of 1973).
International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)
 

National Regulation and International Agreements

 
Type of property and law Validity International Agreements Signed
Patent
 
Swiss Patent Law of 1954; revised in 2007
20 years Patent Cooperation Treaty (PCT)
Strasbourg agreement Concerning the International Patent Classification
Trademark
 
Swiss Federal Trademark Statute
10 years, extendable for another 10 years & so on. Trademark law treaty
Nice agreement
Protocol relating to the Madrid Agreement
Design
 
Swiss Federal Statute on the Protection of Designs and Industrial Models
5 years, extendable up to 25 years.  
Copyright
 
Swiss Federal Copyright Statute
Life long, 50-70 years after death of person. Berne convention
Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms
Rome ConventionFor the Protection of Performers, Producers of Phonograms and Broadcasting Organizations
WIPO Copyright Treaty
WIPO Performances and Phonograms Treaty
Industrial Models
 
Swiss Federal Statute on the Protection of Designs and Industrial Models
5 years, extendable up to 25 years.
 

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Legal Framework

Independence of Justice
The judiciary is independent in Switzerland.
Equal Treatment of Nationals and Foreigners
Foreign nationals can expect a free trial from the country’s judicial system.
The Language of Justice
The judicial languages used in the country are: German, French and Italian.
Recourse to an Interpreter
Possible
Sources of the Law and Legal Similarities
The main source of the law is the constitution of 1848, amended completely in 1874 and 2000.

 

 The Swiss federal system is characterized by substantial decentralization. The cantons and half-cantons have control over much of economic and social policies having their own laws, with the federal government's powers largely limited to foreign affairs and some economic policy.

The country’s legal system is based on civil law system influenced by customary law and judicial review of various legislative acts.

Switzerland accepts compulsory ICJ jurisdiction, but with reservations.

Checking National Laws Online
Swiss Institute of Comparative law
Swiss Law online
 
Find Legal Experts in Switzerland on GlobalTrade.net.
 

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Standards

National Standards Organizations
Swiss Standards Association SNV (Schweizerische Normen Vereinigung). SNV is the umbrella of all standards and certification organisations in Switzerland.
Integration in the International Standards Network
SNV is a member :

 

 International Standard organization (ISO)

International Electrotechnical Commission (IEC)

CEN (European agency for standards)

International Communication Union (ITU)

International Electrotechnical Commission (IEC)

Classification of Standards
The various domains of standardization along with relevant organisation is mentioned below:

 

1. Electrosuisse Domains covered: electrical savety standards, electromagnetic emissions

2. SIA   Domains covered: building standards (above and underground construction,cultural aspects, environmental critera, insulation, air-cond/heating/safety)

3. VSS Domains covered: traffic safety, planning of public and private sector transportation networks, energy efficiency, signaling, safety in tunnels, financing

4. SVGW Sector covered: quality standards of processes and equipment for drinking water and natural gas

5. VSA Sector covered: sewage treatment and water pollution control

6. SICTA (Swiss Information & Communications Technology Association)  Sector covered: Communications equipment

7. BAKOM (Swiss Federal Office for Communications) Sector covered: telecommunications incl. radio and TV;

8. Swissmem  Sector covered: industrial machinery such as machine tools, textile machines,packaging machine, power generating and distribution equipment etc.

9. Interpharma  Secor covered: manufacturers of pharmaceuticals with own research departments

10. SWISSMEDIC Sector covered: Therapeutic Products (Swiss government agency similar to FDA in USA)

11. SUVA Sector covered: Occupational safety.

12. BAG Sector covered: public health

Online Consultation of Standards
Visit the SNV.
Certification Organizations
Swiss Federal Office for Metrology and Accreditation (SAS).

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Business Practices

General Information
US Commercial Services -Country Commercial Guides
Executive Planet
Opening Hours and Days
Shops are open everyday except Sunday  from 8h30 am to 12 am , and from 2 to 6 pm (except on Saturday shops close at 4pm). Businesses and Government offices are open between Monday and Friday, the work is done between 8am and 5pm. Whereas banks are open from Monday to Friday between 8h30 am and 4h30 pm.
 

Public Holidays

New Year's Day 1 January
Berchtold's Day 2 January
Saint Joseph's Day March
Good Friday April
Easter Monday April
Ascension May - June
Whit Monday June
National Day 1 August
Assumption 15 August
Swiss Federal Fast September
All Saints' Day 1 November
Conception 8 December
Christmas Day 25 December
Boxing Day 26 December
 
 

Periods When Companies Usually Close

Christmas and New Year Companies generally close for 7-10 days during Christmas & New Year period.
 

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