In Switzerland, special favor is given to newly founded companies. This favor consists in giving an exemption on some important taxes for these companies. This is to support them in order to guarantee their establishment and development. However, the granting of these benefits comes with certain requirements. First of all, the activity planned by the company must represent an economic interest for the Canton and the commune in which it is located. Above all, it must have an impact on employment and the improvement of new technology in this municipality. Secondly, it is forbidden to create a company whose activity could compete with another already existing company. Violation of this rule may result in the termination of these tax breaks.
Moreover, this relief takes the form of a decreasing reduction in the cantonal tax burden. It can even be reduced up to 100% and its term extends over a period of 10 years. Thus, it is possible that in the first year, the exemption is total. Thereafter, the burden relief will increase by 10% each year until the tenth year. At the end of the term, the relief would amount to 10%.
Certain conditions must be met if a company based in Geneva wishes to apply for tax exemption. To do so, the company must change the nature of its business. It will be able to benefit from this relief if it makes significant investments by launching a new range of services or products. It also means giving up part of its activity and production in order to innovate and use new processes and new techniques. If, however, the company simply reorganizes its operations, it will have to abide by the decision of the State Council for the granting of tax relief.
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