Clarity on Swiss Taxes

Beyond limits Swiss tax landscape

4 16

Corporate taxation Individual taxation Clarity on Swiss Taxes

EDITORIAL Welcome

As reform dominates tax agendas worldwide, Switzerland remains competitive on the global tax stage according to KPMG’s “Swiss Tax Report 2018”. This annual study compares corporate and individual tax rates at the national and international level, analyzing data to draw conclusions on the latest developments.

Regulatory change is under way in many tax jurisdictions. KPMG’s Swiss Tax Report 2018 reflects the fact that it usually takes time for the full effects to unfold. Shifts can also be abrupt, however. Perhaps the highest profile example is the recent US tax reform, with its far-reaching implications for individual and corporate taxpayers. So far, initial speculation that the move could trigger a new “race to the bottom” for competitive tax rates among Swiss cantons appears unfounded. Indeed, KPMG’s report shows that natural – viable – tax rate limits have been reached in many cases, and Switzerland’s own Tax Proposal 17 safeguards stability for the foreseeable future.

Supranational regulations, such as BEPS and ATAD II, or even transnational agreements are also increasingly part of Peter Uebelhart the global tax landscape. Ongoing global shifts have Head of Tax, KPMG Switzerland become the norm overall. In addition, digital megatrends are gathering speed, ready to drive the next phase of the tax landscape evolution. What will this mean for Switzerland?

KPMG’s tax experts are observing regulatory and technological developments, ready to analyze the impact for our clients. Please contact us for personal insights and advice on any tax matter.

Individual taxation Peter Uebelhart

3 SWISS TAX REPORT 2018 Corporate taxation

Corporate income tax

Switzerland remains attractive against the global and international tax competition. Cantons of central and eastern Switzerland stand out once again as having particularly low tax rates. Several tax reforms around the world – most recently in the US – are driving the ongoing trend toward lower corporate income tax. Successive cuts are also planned in parts of Europe in the coming years, including France and the UK. Tax rates are also expected to fall in Switzerland, especially in connection with the Tax Proposal 17.

4 Clarity on Swiss Taxes

5 CORPORATE TAXATION: CORPORATE INCOME TAX Which businesses are shouldering the tax burden in Switzerland?

While over two-thirds of taxable companies pay virtually no tax, 2.93% carry almost 90% of the total direct (federal) tax burden. Companies in privileged tax regimes account for 46.5% (around CHF 4.3 billion) of direct federal taxes paid 1.

Contribution of businesses to tax revenues from direct federal taxes 87.76% (by profit levels)

67.04%

Taxpayers

13.62% 10.81% Contribution to 9.68% direct federal 2.93% taxes 1.11% 5.60% 1.28% 0.18% Taxable profit in 0 - 10 10 - 50 50 - 100 100 - 1000 1000+ CHF 1,000/year

1 According to the FTA – Note: latest available data for the tax period 2014. Source: Federal Tax Administration FTA, 2018: https://www.estv.admin.ch/estv/de/home/allgemein/steuerstatistiken/fachinformationen/steuerstatistiken/direkte-bundessteuer/dbst-jp-kantone-2014.html.

6 Clarity on Swiss Taxes

Corporate income tax rates in the cantons – 2017 and 2018 The cantons of central Switzerland once again top the table for the lowest ordinary corporate income tax rates. These cantons also showed little movement in terms of tax rates, with Zug, Schwyz and Schaffhausen the only ones to adjust their rates slightly downward. The bottom of the league is dominated by western Switzerland, the Mittelland region and the city cantons. Jura, Ticino and Solothurn were the only ones to cut rates, and even then only very slightly. However, further cuts – especially in the higher tax cantons – are expected in connection with the pending Tax Proposal 17.

12.32 2017 Lucerne 12.32 2018 12.66 Nidwalden 12.66 Figures in percent 12.74 Obwalden 12.74 13.04 Appenzell A. 13.04 14.16 Appenzell I. 14.16 14.60 Zug 14.51 14.92 Uri 14.92 Schwyz 15.27 15.19 15.61 Neuchâtel 15.61 15.70 Glarus 15.70 15.97 Schaffhausen 15.75 16.12 Grisons 16.12 Thurgau 16.43 16.43 17.40 St. Gallen 17.40 18.61 Aargau 18.61 19.86 Fribourg 19.86 20.66 Jura 20.53 20.67 Ticino 20.55 Basel-Landschaft 20.70 20.70 21.15 Zurich 21.15 Vaud 21.37 21.37 Solothurn 21.49 21.38 21.64 Bern 21.64 21.74 Valais 21.74 22.18 Basel-Stadt 22.18 24.16 Geneva 24.16

Note: max. effective rate on pre-tax profits for federal/cantonal/municipal taxes in the respective cantonal capital. Corporate income tax figures for AI, BL, BE, GE, GL, GR, JU and NE for 2017. Source: KPMG Switzerland.

7 CORPORATE TAXATION: CORPORATE INCOME TAX

Corporate income tax rates in the cantons – trend 2007 vs. 2018 Corporate tax rates have fallen particularly noticeably in Lucerne, Appenzell A., Neuchâtel, Schaffhausen and Grisons, with a rate of 12% emerging in practice as the lowest limit. Only very small changes in ordinary corporate tax rates can be observed in the Mittelland region, western Switzerland and the city cantons. Within this group, Basel-Landschaft was the only canton to significantly cut the rate, while Valais actually increased its rate marginally.

18.90 2007 Lucerne - 6.58 12.32 2018 17.27 Nidwalden - 4.61 12.66 Figures in percent 13.12 Obwalden - 0.38 12.74 18.04 Appenzell A. - 5.00 13.04 15.47 Appenzell I. - 1.31 14.16 16.10 Zug - 1.59 14.51 16.32 Uri - 1.40 14.92 19.76 Schwyz - 4.57 15.19 22.18 Neuchâtel - 6.57 15.61 19.98 Glarus - 4.28 15.70 22.84 Schaffhausen - 7.09 15.75 29.06 Grisons - 12.94 16.12 16.98 Thurgau - 0.55 16.43 19.08 St. Gallen - 1.68 17.40 22.32 Aargau - 3.71 18.61 21.95 Fribourg - 2.09 19.86 21.12 Jura - 0.59 20.53 22.00 Ticino - 1.45 20.55 25.65 Basel-Landschaft - 4.95 20.70 21.32 Zurich - 0.17 21.15 23.53 Vaud - 2.16 21.37 22.76 Solothurn -1.38 21.38 23.40 Bern -1.76 21.64 21.57 Valais +0.17 21.74 24.81 Basel-Stadt - 2.63 22.18 24.24 Geneva - 0.08 24.16

8 Clarity on Swiss Taxes

Corporate income tax rates in the cantons – trend 2007 to 2018 Average income tax rates continue to fall marginally.

– 3.05%

20.76% 19.44% 18.96% 18.70% 18.31% 18.06% 18.01% 17.90% 17.89% 17.80% 1 7. 7 4 % 17.71%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

30% Genf Corporate income tax rates in the cantons – trend 2007 to 2018 Corporate income tax rates continue to stagnate, with Schwyz, Zug and Basel-Stadt 28% Schaffhausen alone in reducing rates slightly. Bern

26% Waadt

Zürich Geneva 24% Aargau Basel-Stadt 22% Bern CH-Durchschnitt Vaud Zurich St. Gallen 20% Graubünden Aargau 18% Swiss averageSchaffhausen St. Gallen Neuenburg Grisons 16% Schaffhausen Neuchâtel Schwyz Schwyz Zug 14% Zug Obwalden Nidwalden Obwalden Lucerne 12% Nidwalden

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Luzern

9 CORPORATE TAXATION: CORPORATE INCOME TAX

Corporate income tax rates in the cantons in 2018

Cantons with a corporate income tax rate above the Swiss average (17.71%) Cantons with a corporate income tax rate below the Swiss average (17.71%) 22.2 Basel-Stadt Figures in percent

18.6 20.7 Aargau 20.5 Basel-Landschaft Jura 21.4 Solothurn 12.3 Lucerne 15.6 Neuchâtel 12.7 21.6 Obwalden Bern 19.9 21.4 Fribourg Vaud

21.7 Valais 24.2 Geneva

10 Clarity on Swiss Taxes

15.8 Schaffhausen

16.4 Thurgau 18.6 Aargau 13.0 21.2 Appenzell A. Zurich 14.2 1 7. 4 Appenzell I. St. Gallen 14.5 12.3 Zug Lucerne 15.2 Schwyz 15.7 12.7 Glarus Nidwalden 14.9 Uri 16.1 Grisons

20.6 Ticino

11 CORPORATE TAXATION: CORPORATE INCOME TAX

The cantons compared with European countries The comparison with Europe shows hardly any change in the lower tax rates, with the cantons of central Switzerland enjoying a particularly good position. The Channel Islands and certain (south) eastern European states are the only locations to offer even lower ordinary corporate income tax rates. Ireland remains Switzerland’s main competitor in Europe. There is little change in Europe’s center field apart from Croatia and a few Swiss cantons, which lowered their income tax rates.

Guernsey +/– 0 Montenegro 9.00 Hungary 9.00 Bulgaria 10.00 Lucerne 12.32 Ireland 12.50 Jura Liechtenstein 12.50 Cyprus 12.50 Nidwalden 12.66 Obwalden 12.74 Appenzell A. 13.04 Appenzell I. 14.16 Zug 14.60 | 14.51 - 0.09 Uri 14.92 Albania 15.00 Lithuania 15.00 Serbia 15.00 Schwyz 15.27 | 15.19 - 0.08 Neuchâtel 15.61 Glarus 15.70 Schaffhausen 15.97 | 15.75 - 0.22 Romania 16.00 Grisons 16.12 Thurgau 16.43 St. Gallen 17.40 Croatia 20.00 | 18.00 - 2.00 Ukraine 18.00 Aargau 18.61 Poland 19.00

Maximum corporate income tax rates, CH: max. effective rate on pre-tax profits for federal/cantonal/municipal taxes in the respective cantonal capital. Corporate income tax figures for Albania, AI, GL, GR and NE for 2017. Sources: KPMG Switzerland, KPMG International: https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corporate-tax-rates-table.html.

12 Clarity on Swiss Taxes

The countries of central Europe bring up the rear in the attractiveness rankings for ordinary corporate tax rates. Norway and Luxembourg reduced their rates once again in 2018 and France is planning successive cuts to bring its rate down to 25% by 2022. Turkey and Germany bucked the trend by increasing their rates.

UK 19.00 2018 Slovenia 19.00 +/- compared with previous year Fribourg 19.86 Figures in percent Estonia 20.00 Jura 20.66 | 20.53 - 0.13 Ticino 20.67 | 20.55 - 0.12 Basel-Landschaft 20.70 Slovakia 21.00 Zurich 21.15 Vaud 21.37 Solothurn 21.49 | 21.38 - 0.11 Bern 21.64 Valais 21.74 Turkey 20.00 | 22.00 + 2.00 Denmark 22.00 Sweden 22.00 Basel-Stadt 22.18 Norway 24.00 | 23.00 - 1.00 Italy 24.00 Geneva 24.16 The Netherlands 25.00 Austria 25.00 Spain 25.00 Luxembourg 27.08 | 26.01 - 1.07 Greece 29.00 Germany 29.79 | 30.00 + 0.21 France 33.33 | 33.00 - 0.33 Malta 35.00

Maximum corporate income tax rates, CH: max. effective rate on pre-tax profits for federal/cantonal/municipal taxes in the respective cantonal capital. Corporate income tax figures for BE, BL, GE and JU for 2017. Sources: KPMG Switzerland, KPMG International: https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corporate-tax-rates-table.html.

13 CORPORATE TAXATION: CORPORATE INCOME TAX

Global comparison (selected countries) Despite massive tax cuts in the US, the famous offshore domiciles plus Hong Kong and Singapore remain the clear leaders in terms of tax appeal. In a global comparison, Switzerland retains its place in the top third.

Bahamas 0.00 2018 +/- compared with Bahrain 0.00 previous year Bermuda 0.00 Figures in percent Cayman Islands 0.00 Dubai 0.00 Qatar 10.00 Hong Kong 16.50 Singapore 1 7. 0 0 Swiss average 17.74 | 17.71 - 0.03 Russia 20.00 Malaysia 24.00 China 25.00 Indonesia 25.00 Panama 25.00 Canada 26.50 USA 40.00 | 27.00 - 13.00 South Africa 28.00 Australia 30.00 Japan 30.86 Brazil 34.00 India 34.61 | 35.00 +0.39 UAE 55.00

Maximum corporate income tax rates, CH: max. effective rate on pre-tax profits for federal/cantonal/municipal taxes in the respective cantonal capital. Corporate income tax figures for Bahamas, Bermuda, Cayman Islands, Dubai, Russia and UAE for 2017. Sources: KPMG Switzerland, KPMG International: https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corporate-tax-rates-table.html.

Trend: countries 2007 – 2018 Only a few countries have actually increased their corporate income tax rates since 2007.

28.00 2007 Mexico + 2.00 30.00 2018 18.00 Iceland + 2.00 20.00 Figures in percent 19.00 Slovakia + 2.00 21.00 25.00 Greece + 4.00 29.00 1 7. 0 0 Chile + 9.00 26.00

Maximum corporate income tax rates, Source: KPMG International: https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corporate-tax-rates-table.html.

14 Clarity on Swiss Taxes

Trend: countries 2007 – 2018 In recent years, corporate income taxes have seen huge reductions, especially in the Middle East and – currently – in the US. The UK and France have also already announced a larger cut.

55.00 Kuwait - 40.00 15.00 35.00 Gibraltar - 25.00 10.00 35.00 Qatar - 25.00 10.00 37.25 Italy - 13.25 24.00 40.00 USA - 13.00 27.00 30.00 UK - 11.00 19.00 40.69 Japan - 9.83 30.86 38.36 Germany - 8.36 30.00 33.00 China - 8.00 25.00 16.00 Hungary - 7.00 9.00 28.00 Sweden - 6.00 22.00 25.00 Jordan - 5.00 20.00 24.00 Russia - 4.00 20.00 29.63 Luxembourg - 3.62 26.01 20.76 Swiss average - 3.05 17.71 27.00 Malaysia - 3.00 24.00 20.00 Singapore - 3.00 1 7. 0 0 27.50 South Korea - 2.50 25.00 17.50 Hong Kong - 1.00 16.50 25.50 The Netherlands - 0.50 2007 25.00 2018 33.33 France - 0.33 33.00 Figures in percent

Maximum corporate income tax rates, CH: max. effective rate on pre-tax profits for federal/cantonal/municipal taxes in the respective cantonal capital. Corporate income tax figures for Gibraltar and Russia for 2017. Sources: KPMG Switzerland, KPMG International: https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corporate-tax-rates-table.html.

15 SWISS TAX REPORT 2018 Individual taxation

Income tax

Income tax rates have not seen any major changes in the past year in Switzerland or internationally. The general downward trend in individual tax rates appears to be tailing off. Switzerland remains a highly attractive location not just for businesses, but also for individuals.

16 Clarity on Swiss Taxes

17 INDIVIDUAL TAXATION: INCOME TAX Who shoulders the tax burden in Switzerland?

In Switzerland, 3.63% of taxpayers, i.e. those with the highest income, pay more than 50% of direct federal taxes from natural persons.

Contribution of individuals to tax revenues from direct federal taxes 53.06% (by income bracket)

35.04%

26.19%

16.29% 15.69% 15.14%

12.78%

Taxpayers 8.24% 7.00% Contribution to direct federal 4.31% taxes 3.63% 2.63% Taxable income in CHF 1,000 / year 0 - 50 50 - 75 75 - 100 100 - 150 150 - 200 200+

Note: latest available data for the tax period 2014. Source: Federal Tax Administration FTA , 2018: https://www.estv.admin.ch/estv/de/home/allgemein/steuerstatistiken/fachinformationen/steuerstatistiken/direkte-bundessteuer/np_kanton_dbs_2014.html.

18 Clarity on Swiss Taxes

79.45

99 - 100

The 10% of taxpayers with the highest income shoulder the burden for 80% of direct federal taxes, while the top 1% in terms of income account for 42.74% (prior year 41.3%).

Contribution of individuals to tax revenues from direct federal taxes 42.74 (by income bracket) Figures in percent

98 - 99

11.04

97 - 98

6.90

96 - 97 4.85

95 - 96 3.62 9.41 90 - 95

4.48 10.30 2.71 6.95 1.75 Percentage 1.03 0.16 0.36 0.65 share of 0.00 taxpayers in direct federal 0 10 20 30 40 50 60 70 80 90 100 taxes

Note: latest available data for the tax period 2014, including persons taxed on a lump-sum basis and taxpayers where income taken into account in determining the tax rate is different from the taxable income. Source: Federal Tax Administration FTA, 2018: https://www.estv.admin.ch/estv/de/home/allgemein/steuerstatistiken/fachinformationen/steuerstatistiken/direkte-bundessteuer.html.

19 INDIVIDUAL TAXATION: INCOME TAX

Income tax rates in the cantons – 2017 and 2018 The cantons of central Switzerland also lead the tax league for individual taxation. The bottom of the ranking is dominated by the cantons of western Switzerland and the Mittelland region. Elsewhere there was no movement in tax rates, apart from in Lucerne.

22.86 2017 Zug 22.86 2018 24.30 Obwalden 24.30 Figures in percent

Appenzell I. 24.86 24.86 25.35 Uri 25.35 Nidwalden 25.55 25.55 28.21 Schwyz 28.21 30.48 Appenzell A. 30.48 31.16 Lucerne 31.17 Glarus 31.56 31.56 32.18 Grisons 32.18 Schaffhausen 32.29 32.29 32.48 Thurgau 32.48 33.52 St. Gallen 33.52 34.05 Aargau 34.05 34.18 Solothurn 34.18 36.02 Fribourg 36.02 36.50 Valais 36.50 Basel-Stadt 37.43 37.43 Neuchâtel 39.33 39.33 39.76 Zurich 39.76 40.46 Jura 40.46 Ticino 40.72 40.72 Bern 41.27 41.27 Vaud 41.50 41.50 42.17 Basel-Landschaft 42.17 Geneva 44.75 44.75

Note: max. income tax rates for single taxpayers with no children and no religious denomination living in the respective cantonal capital. Source: KPMG Switzerland.

20 Clarity on Swiss Taxes

Income tax rates in the cantons – trend 2007 to 2018 After a modest slide in recent years, the average maximum tax rates appear to have stabilized.

– 0.89%

34.85% 34.61% 34.25% 34.05% 33.84% 33.76% 33.77% 33.86% 33.98% 33.99% 33.96% 33.96%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Note: max. income tax rates for single taxpayers with no children and no religious denomination living in the respective cantonal capital. Source: KPMG Switzerland.

21 INDIVIDUAL TAXATION: INCOME TAX

Income tax rates in the cantons – trend 2007 to 2018 The cantons of central Switzerland have occupied the top spots in the tax ranking for over a decade. Apart from Uri, tax rate reductions were only marginal. Obwalden, Schwyz and Schaffhausen were the only cantons to increase their tax rates, while Aargau, Solothurn and Jura saw the most significant rate cuts. Neuchâtel, Bern, Vaud and Geneva have maintained the same rates for over 10 years.

23.10 2007 Zug 22.86 2018 24.01 Obwalden 24.30 Figures in percent 26.14 Appenzell I. 24.86 33.00 Uri 25.35 26.74 Nidwalden 25.55 25.19 Schwyz 28.21 31.26 Appenzell A. 30.48 32.55 Lucerne 31.17 34.49 Glarus 31.56 32.95 Grisons 32.18 25.20 Schaffhausen 32.29 Thurgau 35.63 32.48 36.16 St. Gallen 33.52 36.84 Aargau 34.05 36.47 Solothurn 34.18 36.33 Fribourg 36.02 37.00 Valais 36.50 38.91 Basel-Stadt 37.43 39.34 Neuchâtel 39.33 40.16 Zurich 39.76 43.54 Jura 40.46 Ticino 41.02 40.72 41.28 Bern 41.27 41.50 Vaud 41.50 42.55 Basel-Landschaft 42.17 44.76 Geneva 44.75

Note: max. income tax rates for single taxpayers with no children and no religious denomination living in the respective cantonal capital. Source: KPMG Switzerland.

22 Clarity on Swiss Taxes

Income tax rates in the cantons – trend 2007 to 2018 The majority of top tax rates saw marginal variations in recent years. Alongside significant cuts in Aargau, Thurgau and St. Gallen, increases were notable in Schaffhausen and Schwyz.

46% Geneva Genf 44% Waadt 42% Vaud Bern Bern 40% Zurich Zürich Neuchâtel 38% Neuenburg Basel-Stadt Basel-Stadt 36%

Aargau Aargau 34% Swiss average St. Gallen CH- Thurgau Durchschnitt 32% Schaffhausen Lucerne St. Gallen 30% Thurgau

28% Schwyz Schaffhausen Luzern 26% Nidwalden Schwyz Obwalden 24% Zug Nidwalden 22% Obwalden

20% Zug 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Note: max. income tax rates for single taxpayers with no children and no religious denomination living in the respective cantonal capital. Source: KPMG Switzerland.

23 INDIVIDUAL TAXATION: INCOME TAX

Individual income tax rates in the cantons in 2018

Cantons with an individual income tax rate above the Swiss average (33.96%) Cantons with an individual income tax rate below the Swiss average (33.96%) 37.4 Basel-Stadt Figures in percent

34.1 42.2 Aargau 40.5 Basel-Landschaft Jura 34.2 Solothurn 31.2 Lucerne 39.3 Neuchâtel 24.3 41.3 Obwalden Bern

36.0 41.5 Fribourg Vaud

36.5 Valais 44.8 Geneva

Note: max. income tax rates for single taxpayers with no children and no religious denomination living in the respective cantonal capital. Source: KPMG Switzerland.

24 Clarity on Swiss Taxes

32.3 Schaffhausen 32.5 Thurgau 34.1 Aargau 30.5 39.8 Appenzell A. Zürich 24.9 33.5 Appenzell I. St. Gallen 22.9 31.2 Zug Lucerne 28.2 Schwyz 31.6 25.6 Glarus Nidwalden 25.4 Uri 32.2 Grisons

40.7 Ticino

25 INDIVIDUAL TAXATION: INCOME TAX

The cantons compared with European countries The tax payable on top incomes remains particularly low in the countries of (south) eastern Europe (partly due to flat rate systems). Latvia ended its flat rate tax system in 2018 and increased its tax rates – massively in some income brackets. Most of the Swiss cantons compare to the European average when it comes to top income tax rates.

Bulgaria 10.00

Lithuania 15.00

Hungary 15.00

Ukraine 18.00

Estonia 20.00

Jersey 20.00

Czech Republic 22.00

Zug 22.86

Obwalden 24.30

Appenzell I. 24.86

Uri 25.35

Nidwalden 25.55

Schwyz 28.21

Appenzell A. 30.48

Lucerne 31.16 | 31.17 + 0.01

Latvia 23.00 | 31.40 + 8.40 Luxemburg

Glarus 31.56

Poland 32.00

Grisons 32.18

Schaffhausen 32.29

Thurgau 32.48

St. Gallen 33.52

Aargau 34.05 The Netherlands

Solothurn 34.18 Finland

Cyprus 35.00

Turkey 35.00

Fribourg 36.02

Max. income tax rates for single taxpayers with no children and no religious denomination living in the respective cantonal capital. Jersey: income tax rate for 2017. Sources: KPMG Switzerland, KPMG International: https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/individual-income-tax-rates-table.html.

26 Clarity on Swiss Taxes

Individual income tax rates are especially high in western Europe and Scandinavia. Following significant increases in 2017, Luxembourg and Sweden cut their tax rates back down in 2018. Norway, Finland and the Netherlands also reduced their tax rates slightly once again. On average, tax rates across Europe have been stagnating in recent years, however.

Valais 36.50 2018 +/- compared with Basel-Stadt 37.43 previous year

Neuchâtel 39.33 Figures in percent

Zurich 39.76

Jura 40.46

Ticino 40.72

Bern 41.27

Vaud 41.50

Basel-Landschaft 42.17

Italy 43.00

Geneva 44.75

Germany 45.00

Greece 45.00

UK 45.00

Spain 45.00

Luxemburg 48.78 | 45.78 - 3.00

Iceland 46.24

Norway 46.72 | 46.60 - 0.12

Ireland 48.00

Portugal 48.00

Belgium 50.00

Slovenia 50.00

The Netherlands 52.00 | 51.95 - 0.05

Finland 54.00 | 53.75 - 0.25

Austria 55.00

Denmark 55.79 | 55.85 + 0.06

Sweden 61.85 | 57.34 - 4.51

Max. income tax rates for single taxpayers with no children and no religious denomination living in the respective cantonal capital. Sources: KPMG Switzerland, KPMG International: https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/individual-income-tax-rates-table.html.

27 INDIVIDUAL TAXATION: INCOME TAX

Global comparison (selected countries) While income tax increases remain off the table in the well-known offshore domiciles as well as several states in the Middle East, countries like South Africa, Australia, China or Japan have very high tax rates by global standards. The US also cut tax rates for natural persons this year, albeit less extensively than for companies.

Bahamas 0.00 2017

2018 Bahrain 0.00 Figures in percent Bermuda 0.00

Cayman Islands 0.00

Oman 0.00

Qatar 0.00

UAE 0.00

13.00 Russia 13.00 15.00 Hong Kong 15.00 20.00 Jordan 20.00 22.00 Singapore 22.00 27.50 Brazil 27.50 28.00 Malaysia 28.00 30.00 Indonesia 30.00 33.00 New Zealand 33.00 33.96 Swiss average 33.96 35.54 India 35.88 39.60 USA 37.00 45.00 Australia 45.00 45.00 China 45.00 45.00 South Africa 45.00 55.95 Japan 55.95

Max. income tax rates for single taxpayers with no children and no religious denomination living in the respective capital. Bahrain and Qatar: income tax rates for 2017. Sources: KPMG Switzerland, KPMG International: https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/individual-income-tax-rates-table.html.

28 Clarity on Swiss Taxes

Trend: countries 2007 – 2018 Following the introduction of flat rate taxes, the income tax rates for the highest earners have fallen massively in central Europe over the past years. Rising top income tax rates can be observed in western and southeast Europe in particular.

36.00 2007 Hungary - 21.00 15.00 2018 24.00 Bulgaria - 14.00 10.00 Figures in percent 27.00 Lithuania - 12.00 15.00 32.00 Czech Republic - 10.00 22.00 45.00 Croatia - 9.00 36.00 40.00 Poland - 8.00 32.00 25.00 Jordan - 5.00 20.00 59.00 Denmark - 3.15 55.85 16.00 Hong Kong -1.00 15.00 34.85 Swiss average - 0.89 33.96 45.00 Germany 0.00 45.00 28.00 Malaysia 0.00 28.00 18.00 Isle of Man + 2.00 20.00 35.00 USA + 2.00 37.00 43.00 Spain + 2.00 45.00 30.00 Cyprus + 5.00 35.00 40.00 Greece + 5.00 45.00 40.00 UK + 5.00 45.00 25.00 Latvia + 6.40 31.40 39.00 Luxembourg + 6.78 45.78 41.00 Ireland + 7.00 48.00 35.70 Iceland + 10.54 46.24

Max. income tax rates for single taxpayers with no children and no religious denomination living in the respective capital. Sources: KPMG Switzerland, KPMG International: https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/individual-income-tax-rates-table.html.

29 PINBOARD

“Clarity on” publications This series of publications from KPMG Switzerland provides insights, analyses and studies on a range of topics. All publications are available online. For more information, please contact [email protected].

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30 Clarity on Swiss Taxes

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For further information on Clarity on Swiss Taxes

Please contact: Publisher KPMG AG Peter Uebelhart Badenerstrasse 172 Head of Tax and Member of PO Box the Executive Committee CH-8036 Zurich +41 58 249 42 24 [email protected] Orders Tax Marketing +41 58 249 29 69 Your local contacts for tax [email protected] matters: Concept and editing Zurich / Ticino Central Switzerland Eva Häfliger, KPMG AG Stefan Kuhn Dr. Frank Lampert Sandrine Hedinger, KPMG AG Partner Partner +41 58 249 54 14 +41 58 249 49 84 Design [email protected] [email protected] Dany Studerus, KPMG AG

Mittelland Eastern Switzerland Illustrations Hans Jürg Steiner Dr. Peter Michael [Page 1, 32] van Beusekom design Partner Partner & brand solution +41 58 249 20 57 +41 58 249 25 54 [email protected] [email protected] Pictures Shutterstock Western Switzerland Basel Vincent Thalmann Reiner Denner Partner Partner +41 58 249 64 18 +41 58 249 42 40 [email protected] [email protected]

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