For a company established in Geneva, taxation of profit is not a single line on an assessment notice: it results from the overlap of three levels of taxation, applied to a taxable base that is not simply the accounting result, and complemented by a separate tax on equity. Understanding this mechanism in advance — during the financial year, not at the moment of filing the return — is what distinguishes managed taxation from a tax adjustment suffered after the fact.
This guide describes how corporate income tax works in the canton of Geneva, without stating any figure for a rate, whether federal, cantonal, communal or effective: these rates change and must be checked with the cantonal tax administration or a professional following their up-to-date publications. Established on Boulevard Georges-Favon in Geneva, AX-Fiduciaire is familiar with the cantonal administration's practices on these matters.
Three levels of taxation, one "effective rate"
A Geneva company's profit is simultaneously subject to:
- Direct federal tax, collected by the Confederation on all Swiss companies under uniform rules throughout the country.
- Cantonal tax, specific to the canton of Geneva, whose regime falls under cantonal tax legislation.
- Communal tax, calculated according to the municipality of the company's registered office, on a base coordinated with cantonal tax.
In practice, these three levies are collected together by the cantonal tax administration on the basis of a single return and a single assessment, which explains the frequent use of the expression "effective rate" or "overall rate" to describe their sum.
This effective rate, direct federal tax included, rose from 14% to 14.7% — an increase of 0.7 point that offsets the abolition of the municipal business tax, abolished with effect from 1 January 2024: the resulting shortfall for Geneva's municipalities was absorbed into the profit tax rate rather than collected separately. Within this total, direct federal tax accounts for 8.5% of the net profit of legal entities, a rate set by the Confederation and identical throughout Switzerland. In addition, under the tax reform and AVS financing act (RFFA), Geneva applies a floor rate of profit taxation of 13.48%.
The exact effective rate nonetheless remains specific to each company, as it depends on the federal scale, the cantonal scale and the coefficient of the municipality of the registered office — it therefore varies from one municipality to another within the canton itself. This is why the cantonal tax administration provides a calculator rather than a single rate, which also explains the discrepancies one may read from one source to another. The rate applicable to a given financial year, for the relevant municipality of the registered office, must be obtained from the cantonal tax administration or confirmed by a tax representative following its publications.
The taxable base: a restated profit, not an accounting profit
The base to which the tax applies is not directly the profit shown in the company's profit and loss account. It starts from that figure, but it is restated according to rules specific to tax law:
- Reinstatement of expenses not justified by business use, where the administration considers that a recorded expense does not correspond to a genuine need of the company or exceeds what an independent third party would accept.
- Correction of excessive depreciation and provisions, where they exceed what is justified by the actual depreciation of an asset or the risk actually covered.
- Account taken of the dissolution of hidden reserves, which again becomes a taxable profit item at the moment it materialises.
- Neutralisation of certain income or expenses under rules specific to corporate tax law (participations, losses carried forward from prior years within legal limits, etc.).
It is this restatement work — not the simple reading of the balance sheet — that determines the amount actually taxable, and it is also the ground on which most discussions with the cantonal tax administration take place during assessment.
Capital tax: a separate levy
In Geneva as in other cantons, companies are also subject to a capital tax, cantonal and communal, which must not be confused with corporate income tax. It is based on the company's equity: share capital or corporate capital, open reserves, and, in certain cases, certain hidden reserves taxed at the time of their creation.
The base rate of this tax is 1.8‰, corresponding to an effective rate of around 0.4% once cantonal and communal additional cents are taken into account. A reduced rate of 0.005‰ — an effective rate of around 0.001% — applies to the portion of equity capital relating to patents and comparable rights, participations, and loans granted to group companies.
The particularity of this tax is that it is due independently of the financial year's result: a loss-making company, or one whose taxable profit is nil after restatement, may still owe capital tax as soon as it holds equity. This point deserves to be anticipated when structuring a company's capital, in particular for companies that build up significant reserves without distributing them.
Expenses justified by business use: where adjustments arise
The concept of an expense justified by business use is central: only expenses meeting this requirement are deductible from taxable profit. The most frequent adjustments concern:
- Remuneration paid to shareholder-managers, where the amount appears disproportionate to the role performed and to what an independent director would receive in a comparable situation.
- Representation and travel expenses that are insufficiently documented, or whose personal character is not clearly excluded.
- Services between related companies (management fees, cost recharges, intra-group loans), where the amount does not correspond to arm's-length conditions.
- Provisions set up without precise economic justification, or maintained after the risk they cover has disappeared.
In all these cases, the burden of proving the business character of the expense falls in practice on the company. Contemporaneous documentation of decisions — contracts, minutes, market comparables — is what allows an expense to be supported in the event of an audit, far more effectively than a justification reconstructed after the fact.
Hidden reserves and provisions: anticipating their dissolution
A hidden reserve arises when the book value of an asset is lower than its real value, generally following depreciation or a provision that reduced the taxable result of a prior year without exactly matching the actual loss in value. As long as it is not dissolved, this reserve is not taxed. It becomes taxable as soon as an event brings it to light: sale of the asset concerned, reversal of a provision that has become pointless, restructuring.
The creation and dissolution of hidden reserves is among the points the cantonal tax administration examines closely, as they can be used — legitimately or not — to smooth the taxable result from one year to the next. A company planning an operation likely to dissolve a significant hidden reserve (disposal of an asset, restructuring, partial liquidation) has an interest in anticipating its tax impact well before the operation itself.
Return and instalments, in principle
The company files its tax return after the close of its financial year, within the deadline set by the Geneva cantonal tax administration — an extension can in principle be obtained, in particular where the return is prepared by a professional representative. During the financial year, the administration invoices provisional instalments, calculated on the basis of an estimated profit (often derived from the last assessed financial year), which are then adjusted at final assessment. A significant gap between the instalments paid and the tax finally due results in a balance to be paid, possibly with interest, or in a refund.
For 2026, the Conseil d'État set the discount rate at 0.1% (against 0.5% in 2025) and the rate of interest in favour of the State at 2.6% (against 3% in 2025) — rates that apply respectively to instalments paid in advance and to balances due after assessment.
What is prepared during the financial year, not at the time of filing
Most difficulties encountered during an assessment are not resolved at the moment the return is drafted: they are prepared, or avoided, during the financial year. In practice, this means:
- Rigorous, up-to-date bookkeeping, documenting each decision at the time it is made rather than reconstructing a justification after the fact.
- Regular review of sensitive expenses (management remuneration, intra-group services) against what an independent third party would accept.
- Anticipation of operations likely to dissolve hidden reserves, to measure their tax impact before they occur.
- Monitoring of instalments to avoid a significant balance, and therefore interest, at final assessment.
It is this anticipation, more than the drafting of the return alone, that determines the quality of a Geneva company's taxation over time.
What AX-Fiduciaire does
Established in Geneva, AX-Fiduciaire is familiar with the cantonal tax administration's practices regarding corporate income tax. We support our clients throughout the financial year — bookkeeping, review of sensitive expenses, anticipation of operations with tax impact — and then in preparing the return and monitoring instalments, so that the year-end holds no surprises. This support is part of our services for Geneva companies, including those in the formation stage, and combines with the monitoring of payroll and social charges where the company employs staff.
Good to know: federal, cantonal and communal rates, as well as the overall effective rate, change and depend on the municipality of the registered office. Consult the Geneva cantonal tax administration for any figure applicable to your company, and compare the Geneva regime with that of other cantons on our tax rates by canton page. See also our page on withholding tax. Request a quote from our Geneva fiduciary.
Sources
Information verified on 23 September 2026. Rates and scales are reviewed periodically: check the publication date at the source before making any decision.