Profit and capital tax
Profit taxation - tax on business success
The profit tax is the tax that companies have to pay on their taxable net profit, i.e. the difference between costs and revenues.
The StHG does not contain any regulations on the scope of tax liability. The cantonal legislators are therefore free to determine the extent of the tax liability themselves. However, certain principles apply to profit tax: the periodicity principle, the principle of completeness and the relevance of the commercial balance sheet.
The balance sheet and income statement are used as the basis for tax calculations and tax returns, but are checked by the relevant tax authorities for compatibility with tax regulations.
Note: Companies are allowed make appropriate corrections. The reason for this is that while in the commercial balance sheet the profit should be shown as low as possible in order to protect creditors, the tax authorities demand the highest possible proof of profit. Particular caution is required with regard to tax depreciation, hidden reserves, provisions, hidden equity and the participation deduction.
Taxation of capital - The wealth tax for companies
Like the wealth tax, the capital tax is levied only by the cantons, after the capital tax was abolished at the federal level in 1998. The cantons are bound by the general principles of taxation as well as the provisions of the StHG when structuring capital tax.
This sometimes leads to drastic cantonal differences in the scope of taxation. Object of taxation is equity capital which is much more difficult to determine than the net assets of individuals, since equity capital is made up of different parts such as share capital, reserves and hidden equity. The capital tax is calculated according to the cut-off date principle as well.
What happens in case of a loss?
Not every fiscal year is profitable. If a company cannot show a profit, it does not have to pay profit tax. Insteas losses may be deducted.
This is even the case for later years. According to Art. 67 DBG or Art. 25 para. 2 StHG, losses from seven financial years preceding the tax period may be deducted from net profit for the tax period if they could not be taken into account in the calculation of the taxable net profit for these years.
This regulation on loss carry-forwards is particularly interesting for young companies or start-ups that do not yet generate profits in the first few years.