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PwC’s international tax comparison 2020

Get an overview of the tax landscape in and across the world with PwC

www.pwc.ch/international-tax-comparison PwC’s international tax comparison 2020 2 Contents

Comparison of taxes for corporations and individuals 4 Comparing taxes: legal entities 5 2020 corporate tax rates in Switzerland 6 2020 corporate tax rates in the EU and Switzerland 7 2020 corporate tax rates in OECD and G20 countries 8 Comparing taxes: natural persons 9 2020 tax burden for natural persons (100’000 CHF net income) 10 2020 tax burden for natural persons (250’000 CHF net income) 12 2020 tax burden for natural persons (marginal tax rate) 14 Your contacts 16

3 PwC’s international tax comparison 2020 Comparison of taxes for corporations and individuals

PwC’s tax comparison tool is a quick and easy way to get or see how Hong Kong compares with , the an idea of tax rates for corporations and individuals. international tax comparison tool allows you to examine all the permutations. Tax rates for natural persons vary depending on net income. You can conduct comparisons on three levels: The map of Switzerland featured in this document shows with a taxable net income of 100 000 CHF, a net income tax rates for the capital of each canton. You’ll also find of 250 000 CHF, and the marginal tax rate. And you can this information and a lot more on our interactive map of do all that for the different cantons. Switzerland. Put together your own comparisons at: www.pwc.ch/international-tax-comparison When it comes to corporate entities, we also offer a worldwide comparison. Whether you want to compare Feel free to contact us if you have any questions. tax rates in the canton of with those in Chile

Armin Marti Stefan Schmid Kornel Wick Partner Partner Director Leader Tax Policy Tax & Legal Services Tax & Legal Services

PwC’s international tax comparison 2020 4 Comparing taxes: legal entities

Compared to 2019, there have been some significant As a result of the Swiss tax reform, due to the introduction reductions in ordinary cantonal tax rates in many cantons. of new relief measures, from 2020 the effective corporate This is a result on Swiss corporate tax reform, which income tax rate can further be reduced for companies became effective as of 1 January 2020. qualifying for one or more of the newly introduced relief measures, such as the deduction for R&D costs, the The graphic below shows very clearly that the cantons patent box deduction, the deduction on net equity (the of , and have some of the highest tax latter in the canton of Zurich only) or if they qualify for rates in the country, while tax rates in temporary transition relief due to the abolishment of are significantly lower. former tax regimes.

14.03% 13.04% -Stadt 13.40% 17.97% Thurgau Basel-Landschaft 13.04% 21.15% Ausserrhoden 17.02% 18.61% Zurich 16.21% 12.66% 14.50% 11.91% St Gall 12.32% 14.13% 13.57% 12.43% Neuchatel 12.66% 21.63% 12.74% Berne 12.64% 14.12% Uri Freiburg 14.77% 14.00%

19.16% 14.00% 20.13% Valais

Low income tax rates High income tax rates

5 PwC’s international tax comparison 2020 2020 corporate tax rates in Switzerland

Within the cantons themselves, corporate tax rates vary and Basel-Stadt. For the other cantons, the tax rate may considerably depending on where the entity is located or vary due to municipality-dependent multipliers. The table moving to. There are various cantons with a uniform tax shows the rate for the cantonal capital. rate for all municipalities, including Neuchâtel, St. Gallen

2020 corporate tax rates in Switzerland

1. Zug Uniform tax rate 11.91%

2. Lucerne Uniform tax rate 12.32%

3. Glarus Uniform tax rate 12.43%

4. Uri Uniform tax rate 12.64%

5. Appenzell Innerrhoden Uniform tax rate 12.66%

6. Nidwalden Uniform tax rate 12.66%

7. Obwalden Uniform tax rate 12.74%

8. Uniform tax rate 13.04%

9. Basel-Stadt Uniform tax rate 13.04%

10. Thurgau Uniform tax rate 13.40%

11. Neuchatel Uniform tax rate 13.57%

12. Vaud Uniform tax rate 14.00%

13. Geneva Uniform tax rate 14.00%

14. Schaffhausen Uniform tax rate 14.03%

15. Uniform tax rate 14.12%

16. Schwyz Uniform tax rate 14.13%

17. St Gall Uniform tax rate 14.50%

18. Grisons Uniform tax rate 14.77%

19. Solothurn Uniform tax rate 16.21%

20. Jura Uniform tax rate 17.02%

21. Basel-Landschaft Uniform tax rate 17.97%

22. Aargau Uniform tax rate 18.61%

23. Ticino Uniform tax rate 19.16%

24. Valais Uniform tax rate 20.13%

25. Zurich Uniform tax rate 21.15%

26. Berne Uniform tax rate 21.63%

0% 5% 10% 15% 20% 25%

2020 tax burden in cantonal capital

PwC’s international tax comparison 2020 6 2020 corporate tax rates in the EU and Switzerland

The Swiss cantons with the lowest rates in Switzerland The most favourable cantons are near the top of the compare well with the lowest tax rates in EU countries. rankings. The chart compares the corporate tax rates With a tax burden twice as high, the most expensive in Zug and Bern with the tax rates of all EU countries. cantons rank in the lower mid-range internationally.

2020 corporate tax rates in the EU and Switzerland

1. Hungary 9.00% 2. Bulgaria 10.00% 3. Switzerland (Zug) 11.91% 4. 12.50% 5. Lithuania 15.00% 6. Romania 16.00% 7. 18.00% 8. Poland 19.00% 9. Slovenia 19.00% 10. Czech 19.00% 11. Estonia 20.00% 12. Finland 20.00% 13. Latvia 20.00% 14. 21.00% 15. Slowak Republic 21.00% 16. Sweden 21.40% 17. Switzerland (Berne) 21.63% 18. 22.00% 19. 24.00% 20. Greece 24.00% 21. Luxembourg 24.94% 22. Ireland 25.00% 23. 25.00% 24. 25.00% 25. 25.00% 26. Belgium 29.58% 27. 33.33% 28. Malta* 35.00% 29. Germany 36.00%

0% 5% 10% 15% 20% 25% 30% 35% 40%

*Note: special tax refund rules apply

2020 corporate tax rate

7 PwC’s international tax comparison 2020 2020 corporate tax rates in OECD and G20 countries

The Swiss cantons with the lowest rates in Switzerland G20 nations. With a tax burden twice as high, the most compare well with the lowest tax rates in the OECD/ expensive cantons rank in the mid-range internationally.

2020 corporate tax rates: OECD and G20 countries

1. Hungary 9.00% 2. Switzerland (Zug) 11.91% 3. Slovenia 19.00% 4. 19.00% 5. Czech Republic 19.00% 6. Poland 19.00% 7. Finland 20.00% 8. 20.00% 9. 20.00% 10. Latvia 20.00% 11. Estonia 20.00% 12. Slovak Republic 21.00% 13. Portugal 21.00% 14. Sweden 21.40% 15. Switzerland (Berne) 21.63% 16. 22.00% 17. Denmark 22.00% 18. Indonesia 22.00% 19. 23.00% 20. Italy 24.00% 21. Greece 24.00% 22. Luxembourg 24.94% 23. Ireland 25.00% 24. Norway 25.00% 25. South Korea 25.00% 26. Netherlands 25.00% 27. China 25.00% 28. Spain 25.00% 29. Austria 25.00% 30. Chile 27.00% 31. South 28.00% 32. New Zealand 28.00% 33. Belgium 29.58% 34. Argentina 30.00% 35. Australia 30.00% 36. Mexico 30.00% 37. Japan 30.62% 38. Canada 31.00% 39. of America 33.00% 40. France 33.33% 41. Brazil 34.00% 42. Germany 36.00% 43. 44.00%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

PwC’s international tax comparison 2020 8 Comparing taxes: natural persons

Income tax rates in Switzerland vary considerably from Find out how your canton of residence compares with canton to canton and from municipality to municipality. others. At www.pwc.ch/international-tax-comparison For example, Zug has the lowest rate of any cantonal you can use our interactive map of Switzerland to put capital for a taxable income of 100’000 CHF (10.30%), together detailed comparisons. and Neuchatel, the highest (24.10%). Maximum marginal tax rates for high incomes range from 22.40% in Zug, all On the next few pages we present an overview of the the way up to 45.00% for Geneva. cantons.

9 PwC’s international tax comparison 2020 2020 tax burden for natural persons (100’000 CHF net income)

This overview shows tax rates for each cantonal capital. cantonal capital for a net income of 100’000 CHF is the The figures are for a net income of 100’000 CHF. In this municipality of Neuchatel, with a tax rate of almost double scenario Canton Zug (represented by its capital, Zug) that 24.10%. has the lowest tax rate, 10.30%. The most expensive

19.10% Schaffhausen 20.10% Basel-Stadt 17.40% 21.90% Thurgau Basel-Landschaft 18.60% 16.00% Appenzell Ausserrhoden 21.10% 17.20% Zurich Jura 20.00% Aargau Solothurn 13.80% Appenzell Innerrhoden 20.70% 10.30% St Gall 17.10% Zug Lucerne 14.10% 24.10% Schwyz Neuchatel 16.50% 15.00% Glarus Nidwalden 21.10% 13.10% Berne Obwalden 14.50% 21.20% Uri Fribourg 17.30% Grisons 22.80% Vaud

19.30% 22.40% 20.00% Ticino Geneva Valais

Low income tax rates High income tax rates

PwC’s international tax comparison 2020 10 The chart below shows the rates for the different scenario, for example, the highest tax rate is 25.70% in cantonal capitals. However, in some cases there are the municipality of Enges in Canton Neuchatel, compared big differences within individual cantons. Under this with only 24.10% in the canton’s capital, Neuchatel.

2020 tax burden for natural persons (sorted according to rate for 100’000 CHF net income)

1. Zug Zug 10.30% 18.40% 22.40% 2. Obwalden 13.10% 19.10% 24.30%

3. Appenzell Innerrhoden District: Appenzell / Municipality: Appenzell 13.80% 20.70% 24.40% 4. Schwyz Schwyz 14.10% 22.00% 26.80% 5. Uri Altdorf 14.50% 21.00% 25.30% 6. Nidwalden 15.00% 21.80% 25.60% 7. Zurich Zurich 16.00% 27.80% 40.00% 8. Glarus Glarus 16.50% 25.40% 31.50% 9. Lucerne Lucerne 17.10% 25.20% 31.20% 10. Aargau 17.20% 26.70% 34.50% 11. Grisons 17.30% 26.50% 32.20% 12. Thurgau 17.40% 26.10% 32.40% 13. Appenzell Ausserrhoden 18.60% 27.20% 30.70% 14. Schaffhausen Schaffhausen 19.10% 28.50% 31.10% 15. Ticino 19.30% 30.30% 40.60% 16. Solothurn Solothurn 20.00% 29.50% 33.70% 17. Valais Sion 20.00% 31.80% 36.50% 18. Basel-Stadt Basel 20.10% 28.90% 40.50% 19. St Gall St Gall 20.70% 29.70% 33.30% 20. Berne Berne 21.10% 31.80% 41.40% 21. Jura Delémont 21.10% 32.10% 39.90% 22. Fribourg Fribourg 21.20% 32.00% 35.80% 23. Basel-Landschaft 21.90% 33.40% 42.20% 24. Geneva Geneva 22.40% 33.40% 45.00% 25. Vaud 22.80% 35.00% 41.50% 26. Neuchâtel Neuchâtel 24.10% 34.20% 38.10%

0% 10% 20% 30% 40% 50%

100’000 CHF net income 250’000 CHF net income marginal tax rate

11 PwC’s international tax comparison 2020 2020 tax burden for natural persons (250’000 CHF net income)

This overview shows tax rates for each cantonal capital. tax rate of 18.40%. The municipality of Lausanne, with a The figures are for a net income of 250’000 CHF. Zug rate of 35.00%, is at the foot of the rankings. also leads the rankings in this scenario with an attractive

28.50% Schaffhausen 28.90% Basel-Stadt 26.10% 33.40% Thurgau Basel-Landschaft 27.20% 27.80% Appenzell Ausserrhoden 32.10% 26.70% Zurich Jura 29.50% Aargau Solothurn 20.70% Appenzell Innerrhoden 29.70% 18.40% St Gall 25.20% Zug Lucerne 22.00% 34.20% Schwyz Neuchatel 25.40% 21.80% Glarus Nidwalden 31.80% 19.10% Berne Obwalden 21.00% 32.00% Uri Fribourg 26.50% Grisons 35.00% Vaud

30.30% 33.40% 31.80% Ticino Geneva Valais

Low income tax rates High income tax rates

PwC’s international tax comparison 2020 12 The chart below shows the tax rate for the different You can do further comparisons online at cantonal capitals. Rates may vary slightly by www.pwc.ch/international-tax-comparison. municipality due to different communal multipliers, except for Glarus which is the only canton with a uniform tax rate across all municipalities.

2020 tax burden for natural persons (sorted according to rate for 250’000 CHF net income)

1. Zug Zug 10.30% 18.40% 22.40% 2. Obwalden Sarnen 13.10% 19.10% 24.30%

3. Appenzell Innerrhoden District: Appenzell / Municipality: Appenzell 13.80% 20.70% 24.40% 4. Uri Altdorf 14.50% 21.00% 25.30% 5. Nidwalden Stans 15.00% 21.80% 25.60% 6. Schwyz Schwyz 14.10% 22.00% 26.80% 7. Lucerne Lucerne 17.10% 25.20% 31.20% 8. Glarus Glarus 16.50% 25.40% 31.50% 9. Thurgau Frauenfeld 17.40% 26.10% 32.40% 10. Grisons Chur 17.30% 26.50% 32.20% 11. Aargau Aarau 17.20% 26.70% 34.50% 12. Appenzell Ausserrhoden Herisau 18.60% 27.20% 30.70% 13. Zurich Zurich 16.00% 27.80% 40.00% 14. Schaffhausen Schaffhausen 19.10% 28.50% 31.10% 15. Basel-Stadt Basel 20.10% 28.90% 40.50% 16. Solothurn Solothurn 20.00% 29.50% 33.70% 17. St Gall St Gall 20.70% 29.70% 33.30% 18. Ticino Bellinzona 19.30% 30.30% 40.60% 19. Valais Sion 20.00% 31.80% 36.50% 20. Berne Berne 21.10% 31.80% 41.40% 21. Fribourg Fribourg 21.20% 32.00% 35.80% 22. Jura Delémont 21.10% 32.10% 39.90% 23. Basel-Landschaft Liestal 21.90% 33.40% 42.20% 24. Geneva Geneva 22.40% 33.40% 45.00% 25. Neuchâtel Neuchâtel 24.10% 34.20% 38.10% 26. Vaud Lausanne 22.80% 35.00% 41.50%

0% 10% 20% 30% 40% 50%

100’000 CHF net income 250’000 CHF net income marginal tax rate

13 PwC’s international tax comparison 2020 2020 tax burden for natural persons (marginal tax rate)

This overview shows tax rates for each cantonal capital. with a rate of 22.40%. At the foot of the rankings is the The figures refer to the marginal tax rate. Here again, municipality of Geneva with 45.00%, almost double the the municipality of Zug is at the head of the rankings rate of Zug.

31.10% Schaffhausen 40.50% Basel-Stadt 32.40% 42.20% Thurgau Basel-Landschaft 30.70% 40.00% Appenzell Ausserrhoden 39.90% 34.50% Zurich Jura 33.70% Aargau Solothurn 24.40% Appenzell Innerrhoden 33.30% 22.40% St Gall 31.20% Zug Lucerne 26.80% 38.10% Schwyz Neuchatel 31.50% 25.60% Glarus Nidwalden 41.40% 24.30% Berne Obwalden 25.30% 35.80% Uri Fribourg 32.20% Grisons 41.50% Vaud

40.60% 45.00% 36.50% Ticino Geneva Valais

Low income tax rates High income tax rates

PwC’s international tax comparison 2020 14 Depending on the level of income, it makes sense of Schwyz (which at 21.90% even boasts a slightly lower to compare applicable tax rates across cantons and rate than Zug). municipalities. Even though the municipality of Zug has the lowest tax rate of any cantonal capital, a similar tax Do your own personal comparison online at rate is found in the municipality of Wollerau in the canton www.pwc.ch/international-tax-comparison.

2020 tax burden for natural persons (sorted according to marginal tax rate)

1. Zug Zug 10.30% 18.40% 22.40% 2. Obwalden Sarnen 13.10% 19.10% 24.30%

3. Appenzell Innerrhoden District: Appenzell / Municipality: Appenzell 13.80% 20.70% 24.40% 4. Uri Altdorf 14.50% 21.00% 25.30% 5. Nidwalden Stans 15.00% 21.80% 25.60% 6. Schwyz Schwyz 14.10% 22.00% 26.80% 7. Appenzell Ausserrhoden Herisau 18.60% 27.20% 30.70% 8. Schaffhausen Schaffhausen 19.10% 28.50% 31.10% 9. Lucerne Lucerne 17.10% 25.20% 31.20% 10. Glarus Glarus 16.50% 25.40% 31.50% 11. Grisons Chur 17.30% 26.50% 32.20% 12. Thurgau Frauenfeld 17.40% 26.10% 32.40% 13. St Gall St Gall 20.70% 29.70% 33.30% 14. Solothurn Solothurn 20.00% 29.50% 33.70% 15. Aargau Aarau 17.20% 26.70% 34.50% 16. Fribourg Fribourg 21.20% 32.00% 35.80% 17. Valais Sion 20.00% 31.80% 36.50% 18. Neuchâtel Neuchâtel 24.10% 34.20% 38.10% 19. Jura Delémont 21.10% 32.10% 39.90% 20. Zurich Zurich 16.00% 27.80% 40.00% 21. Basel-Stadt Basel 20.10% 28.90% 40.50% 22. Ticino Bellinzona 19.30% 30.30% 40.60% 23. Berne Berne 21.10% 31.80% 41.40% 24. Vaud Lausanne 22.80% 35.00% 41.50% 25. Basel-Landschaft Liestal 21.90% 33.40% 42.20% 26. Geneva Geneva 22.40% 33.40% 45.00%

0% 10% 20% 30% 40% 50%

100’000 CHF net income 250’000 CHF net income marginal tax rate

15 PwC’s international tax comparison 2020 Your contacts

Tax services for corporate entities

Armin Marti Partner and Leader Tax Policy +41 58 792 43 43 [email protected]

Stefan Schmid Partner Tax & Legal Services +41 58 792 44 82 [email protected]

Tax services for private clients

Kornel Wick Director Tax & Legal Services +41 58 792 42 48 [email protected]

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