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Clarity onSwiss TaxesPlaying to natural strengths

16

Individual taxation

4

Corporate taxation

E D ITO R I A L

Switzerland remains competitive on the global tax stage according to KPMG’s “Swiss Tax Report 2019”. This annual study analyzes corporate and individual tax rates in Switzerland and internationally, analyzing data to draw comparisons between locations.

After a long and drawn-out reform process, the Swiss Federal Act on Tax Reform and AHV Financing (TRAF) is reaching the final stages of maturity. Some cantons have already responded by adjusting their corporate tax rates, and others are sure to follow in 2019 and 2020. These steps towards lower tax rates confirm that the Swiss cantons are committed to competitive taxation. This will be welcomed by companies as they seek stability amid the turbulence of global protectionist trends, like tariffs, Brexit and digital service tax.

It’s not just in Switzerland that tax laws are being revised. The national reforms of recent years are part of a global shift towards international harmonization but also increased legislation. For tax departments, these regulatory developments mean increased pressure. Their challenge is to safeguard compliance, while also managing the risk of double or over-taxation. In our fast-paced world, data-driven technology and digital enablers will play an increasingly important role in achieving these aims.

Going forward, it’s important that Switzerland continues to play to its natural strengths to remain an attractive business location and global trading partner. That means creating certainty by finalizing the corporate tax reform, building further on its network of FTAs, delivering its “open for business” message and pressing ahead with the Digital Switzerland strategy.

Our multidisciplinary teams closely follow shifts in the international and Swiss tax landscape, seek innovative ways to respond to change, and deliver expert advice – whatever your current tax topic.

Peter Uebelhart

Peter UebelhartHead of Tax & Legal, KPMG Switzerland

Welcome

Individual taxation

Clarity on Swiss Taxes

3

Corporate taxation

S W I S S TA X R E P O RT 2 019

Corporate income tax

Attractive tax rates remain a natural strength in Switzerland. With some cantons already preparing for the changes that Switzerland’s new tax law will bring, the cluster of lower tax cantons in central and eastern Switzerland is less striking due to lower rates overall. Switzerland compares favorably to most of Europe and is likely to retain this position even as countries like the UK and France successively lower their rates.

4


5

0.16%

100 - 1000

C O R P O R AT E TA X AT I O N : C O R P O R AT E I N C O M E TA X

Contribution of businesses to tax revenues from direct federal taxes

(by profit levels)

67.43%

13.47%

5.53%

9.43%10.77%

88.08%

1.08% 1.24%2.80%

0 - 10 10 - 50 50 - 100 1000+

Taxpayers

Contribution to direct federal taxes

Taxable profit in CHF 1,000/year

Note: Latest available data for the tax period 2015. Source: Swiss Federal Tax Administration FTA, 2019, https://www.estv.admin.ch/estv/de/home/allgemein/ steuerstatistiken/fachinformationen/steuerstatistiken/direkte-bundessteuer/dbst-jp-kantone-2015.html.

While over two-thirds of taxable companies pay virtually no tax, 2.80% carry around 90% of the total direct (federal) tax burden. This means the tax burden is shouldered by an even smaller number of companies than in the prior year (2018: 2.93%).

Which businesses are shouldering the tax burden in Switzerland?

6

22.1813.04Basel-Stadt

Note: max. effective rate on pre-tax profits for federal/cantonal/municipal taxes in the respective cantonal capital. Corporate income tax figures for AI, GL, NE, GE, JU and SG for 2018. The income tax rate of Schaffhausen is based on the tax rate before the vote on 24 March 2019. Source: KPMG Switzerland.

20.5320.53Jura

16.1216.12Grisons

14.9214.92Uri

12.3212.32

12.6612.66

12.7412.74

13.0413.04

14.1614.16

14.5114.35

15.1915.02

15.6115.61

15.7015.68

15.7515.82

16.4316.43

17.4017.40

18.6118.61

19.8619.86

20.5520.55

20.7020.70

21.1521.15

21.3821.38

21.6421.63

21.7421.74

21.3714.00

24.1624.16

2018

2019

Corporate income tax rates in the cantons – 2018 and 2019 The cantons of central Switzerland continue to dominate in terms of lowest ordinary corporate income tax rates. Tax rates in these cantons were generally stable, with very modest downward adjustments in Zug, Schwyz and Glarus only, and a negligible increase in Schaffhausen. Basel-Stadt and Vaud stand out for their drastic tax cut rates (from 22.18% to 13.04% and 21.37% to 14.00%, respectively) in anticipation of the changes to come from TRAF. Further cuts are expected in higher tax cantons, including Geneva, Bern and Zurich, also in connection with TRAF.

Nidwalden

Lucerne

Obwalden

Appenzell A.

Appenzell I.

Zug

Schwyz

Glarus

Neuchâtel

Schaffhausen

Thurgau

St. Gallen

Aargau

Fribourg

Ticino

Basel-Landschaft

Zurich

Solothurn

Bern

Valais

Vaud

Geneva

Figures in percent


7

Obwalden

Solothurn

Jura

Basel-Landschaft

Aargau

Corporate income tax rates in the cantons – trend 2007 to 2019 Ordinary corporate income tax rates barely changed in the Mittelland, Western Switzerland and city cantons. Only Bern, Uri and Ticino cut rates more extensively. Corporate income tax rates fell particularly sharply in Neuchâtel, Schaffhausen, Grisons, Basel-Stadt and Vaud. It is interesting to note that 12% has become established as the minimum rate in practice.

Valais

Geneva

Zurich

Appenzell I.

Uri

Ticino

St. Gallen

Zug

Bern

Fribourg

Glarus

Nidwalden

Schwyz

Appenzell A.

Neuchâtel

Lucerne

Schaffhausen

Vaud

Basel-Stadt

Thurgau

Grisons

Note: max. effective rate on pre-tax profits for federal/cantonal/municipal taxes in the respective cantonal capital. Corporate income tax figures for AI, GE, GL, JU, NE and SG for 2018. Source: KPMG Switzerland.

2007

2019

Figures in percent


18.04 13.04- 5.00

23.53 14.00

17.27 12.66

- 9.53

18.90 12.32

19.76 15.02

22.18 15.61

19.98 15.68

22.84 15.82

29.06 16.12

22.32 18.61

21.95 19.86

25.65 20.70

24.81 13.04

- 6.58

- 4.61

- 4.74

- 6.57

- 4.30

- 7.02

- 3.71

- 2.09

- 4.95

- 11.77

- 12.94

21.57 21.74

+ 0.17

24.24 24.16- 0.08

21.32 21.15- 0.17

13.12 12.74- 0.38

16.98 16.43- 0.55

21.12 20.53- 0.59

15.47 14.16- 1.31

22.76 21.38-1.38

16.32 14.92- 1.40

22.00 20.55- 1.45

19.08 17.40- 1.68

16.10 14.35- 1.75

23.40 21.63-1.77

8


Corporate income tax rates in the cantons – trend 2007 to 2019The recent dip in average Swiss tax rate is attributable primarily to the cuts in Basel-Stadt and Vaud. The trend is set to continue with a larger fall in 2020 when new legislation (TRAF) is expected to come into force.

Corporate income tax rates in the cantons – trend 2007 to 2019 The trend towards stagnation of corporate tax rates continues in 2019. Only Basel-Stadt and Vaud reduced their corporate tax rates.


28%

24%

20%

16%

12%

8%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Luzern

Nidwalden

Obwalden

Appenzell A.(AR)

Appenzell I.(AI)

Zug

Uri

Schwyz

Neuenburg

Glarus

Schaffhausen

Graubünden

Thurgau

St. Gallen

Aargau

Freiburg

Jura

Tessin

Basel-Landschaft

Zürich

Waadt

Lucerne

Nidwalden

Obwalden

Appenzell A.

Appenzell I.

Zug

Uri

Schwyz

Neuchâtel

Glarus

Schaffhausen

Grisons

Thurgau

St. Gallen

Aargau

Fribourg

Jura

Ticino

Basel-Landschaft

Zurich

Vaud

17.74% 17.71%

19.44%

20.76%

18.70%18.96%

18.06%18.31%

17.90%18.01%17.80%17.89%

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

17.06%

2019

– 3.70%


9

Corporate income tax rates in the cantons 2019


10

20.5Jura

19.9Fribourg

21.7Valais

21.6Bern

21.4Solothurn

14.0Vaud

20.7Basel-Landschaft

18.6Aargau 21.2

Zurich

13.0Basel-Stadt

15.8Schaffhausen

16.4Thurgau

13.0Appenzell A.

14.2Appenzell I.

12.3Lucerne

12.7Obwalden

12.7Nidwalden

14.9Uri 16.1

Grisons

17.4St. Gallen

15.7Glarus

15.0Schwyz

14.4Zug

15.6Neuchâtel

20.6Ticino

24.2Geneva

Cantons with a corporate income tax rate below the Swiss average (17.06%)

Figures in percent

Cantons with a corporate income tax rate above the Swiss average (17.06%)


11

Norway

Sweden

15.75 | 15.82

- 7.37

15.19 | 15.02

+ 0.07

16.12

16.43

16.00

15.70 | 15.68

14.92

15.00

15.00

15.00

15.61

18.00

The cantons compared with European countries The comparison with Europe shows hardly any change in lower tax rates, with the cantons of central Switzerland enjoying a particularly positive position. They are joined now by Basel-Stadt and Vaud. 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, with only minimal changes in income tax rates to report in some of the Swiss cantons.

17.40

14.51 | 14.35

14.16

12.66

12.50

12.50

12.50

12.32

18.00

10.00

9.00

12.74

+/– 0

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 Hungary, Liechtenstein, Albania, Ukraine, NE, AI, GL and SG for 2018. 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.


13.04

- 0.16

Schaffhausen

Romania

Glarus

Thurgau

Grisons

Albania

Serbia

Lithuania

Uri

Ukraine

Neuchâtel

Guernsey

Montenegro

Hungary

Bulgaria

Croatia

Lucerne

Ireland

Liechtenstein

Cyprus

Nidwalden

Obwalden

Appenzell I.

Schwyz

Zug

St. Gallen

Appenzell A.

Greece

Bern

Geneva

Fribourg

Basel-Landschaft

Slovakia

Turkey

Ticino

Zurich

Valais

Jura

Denmark

The Netherlands

Austria

Luxembourg

Germany

Spain

Italy

France

Malta

9.00

- 0.17

22.18 | 13.04Basel-Stadt - 9.14

21.37 | 14.00Vaud

- 0.02

Solothurn

12

23.00 | 22.00Norway

- 0.01

- 0.60 22.00 | 21.40Sweden

19.00

19.00UK

Slovenia

19.86

29.00 | 28.00

21.64 | 21.63

20.70

20.55

22.00

21.00

24.16

35.00

33.00 | 31.00

24.00

25.00

30.00

26.01

25.00

25.00

22.00

21.74

21.15

20.53

20.00

Maximum corporate income tax rates, CH: max. effective rate on pre-tax profits for federal/cantonal/municipal taxes 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/corporate-tax-rates-table.html.

Greece

Bern

Geneva

Fribourg

Basel-Landschaft

Slovakia

Turkey

Ticino

Zurich

Valais

Jura

Estonia

Denmark

The Netherlands

Austria

Luxembourg

Germany

Spain

Italy

France

Malta

- 1.00

- 1.00

2019

+/- compared with previous year

Figures in percent

At the lower end of the attractiveness ranking for ordinary corporate tax rates are various European countries. Norway, France and Sweden reduced their rates once again in 2019, with France planning successive cuts to bring its rate down to 25% by 2022.

- 2.00

21.38Solothurn

19.00Poland

18.61Aargau


13

35.00 | 30.00

27.00USA

30.86 | 30.62

34.00

30.00

28.00

26.50

India

Brazil

Canada

South Africa

Australia

Japan

17.00 27.00+ 10.00

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 Bermuda and UAE for 2018. 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.

Global comparison (selected countries) The traditional 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 – this year with a lower average tax rate overall thanks mainly to cuts in Basel-Stadt and Vaud.

25.00

25.00

24.00

20.00

17.71 | 17.06

17.00

16.50

10.00

25.00

0.00

0.00

0.00

0.00

0.00

- 0.65

Trend: countries 2007 – 2019Only a few countries have actually increased their corporate income tax rates since 2007. Even then increases have generally been modest (2% to 3%), with the exception of Chile, which has increased its rate by 10% in total since 2007.

28.00 30.00 18.00 20.00

25.00 28.00

19.00 21.00

+ 2.00

+ 2.00

+ 4.00

+ 3.00

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.

2007

2019

Figures in percent


Chile

Bahamas

Bahrain

Bermuda

Cayman Islands

Dubai

Qatar

Hong Kong

Singapore

Swiss average

Russia

Malaysia

China

Indonesia

Panama

Mexico

Iceland

Greece

Slovakia

2019


Figures in percent

- 0.24

55.00UAE

- 5.00

14

17.50 16.50- 1.00

25.50 25.00- 0.50

Hong Kong

The Netherlands

20.76 17.06- 3.70Swiss average

27.00 24.00 20.00 17.00

- 3.00

- 3.00

Malaysia

Singapore

29.63 26.01- 3.62

33.00 25.00- 8.00

- 6.60

38.36 30.00- 8.36

24.00 20.00- 4.00

16.00 9.00- 7.00

40.69 30.62- 10.07

25.00 20.00- 5.00

Trend: countries 2007 – 2019In recent years, corporate income taxes have seen huge reductions, especially in the Middle East and, with its reform now implemented, the US. The UK and France have also already announced larger cuts.

55.00 15.00 35.00 10.00 35.00 10.00 37.25 24.00

28.00 21.40

- 40.00

- 25.00

- 25.00

- 13.25

30.00 19.00- 11.00

2007

2019

Figures in percent

Luxembourg

China

Sweden

Germany

Russia

Hungary

Japan

Jordan

Kuwait

Gibraltar

Qatar

Italy

27.50 25.00- 2.50South Korea

UK

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 South Korea, Hungary and Qatar for 2018. Sources: KPMG Switzerland, KPMG International, https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corpora-te-tax-rates-table.html.

40.00 27.00- 13.00USA

33.00 31.00- 2.00France


15

Individual taxationIncome tax

Income tax rates in Switzerland and internationally are generally stable, with the significant decrease in the canton of Nidwalden a striking exception. Switzerland remains a highly attractive location not just for businesses, but also for individuals.

S W I S S TA X R E P O RT 2 019

16


17

53.09%

I N D I V I D UA L TA X AT I O N : I N C O M E TA X

2.60%

34.87%

7.00%

26.28%

8.23%

15.67%16.25%

15.17%

12.83%

4.36%

0 - 50 50 - 75

Taxpayers

Contribution to direct federal taxes

Taxable income in CHF 1,000 / year

Note: latest available data for the tax period 2015. Source: Federal Tax Administration FTA, 2019, https://www.estv.admin.ch/estv/de/home/allgemein/steuerstatistiken/fachinformationen/steuerstatistiken/direkte-bundessteuer/np_kanton_dbs_2015.html.

3.66%

75 - 100 100 - 150 150 - 200 200+

Contribution of individuals to tax revenues from direct federal taxes

(by income bracket)

In Switzerland, 3.66% of taxpayers, i.e. those with the highest income, pay more than 50% of direct federal taxes from natural persons.

Who shoulders the tax burden in Switzerland?

18

0.17

4.99

6.95

Contribution of individuals to tax revenues from direct federal taxes

0.00

Percentage share of taxpayers in direct federal taxes

Note: latest available data for the tax period 2015, 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, 2019, https://www.estv.admin.ch/estv/de/home/allgemein/steuerstatistiken/fachinformationen/steuerstatistiken/direkte-bundessteuer.html.

0.37 0.66 1.04 1.772.78

4.59

9.63

10.57

3.73

7.07

10 200 30 40 50 60 70 80 90

97 - 98

96 - 97

95 - 96

90 - 95

11.31

100

Figures in percent

The 10% of taxpayers with the highest income shoulder the burden for almost 80% of direct federal taxes from natural persons, while the top 1% in terms of income contribute 41.33% (prior year 42.74%).

41.33

79.45

99 - 100

98 - 99


19

32.2931.89Schaffhausen

31.1731.16Lucerne

40.4640.15

25.5525.55

24.8624.86

22.8622.38

24.3024.30

25.3525.35

28.2127.53

30.4830.74

31.5631.56

32.1832.18

32.4832.48

33.5233.52

34.0534.38

34.1833.97

36.0236.02

36.5036.50

37.4337.36

39.3338.09

39.7639.76

40.7241.77

41.2741.27

41.5041.50

42.1742.17

44.7544.75

2018

2019

Income tax rates in the cantons – 2018 and 2019The cantons of central Switzerland also lead the tax league for individual taxation. Overall, tax rates in the lower tax cantons were very stable, with some tiny downward movements and one marginal increase (in Appenzell Ausserrhoden). The highest cantonal tax rates for individuals are found in Western Switzerland and the Mittelland region. Rates increased in Aargau and Ticino, but fell in Jura and Neuchâtel.

Note: max. income tax rates for single taxpayers with no children and no religious denomination living in the respective cantonal capital. Income tax figures for AI, GL, OW, SG and UR for 2018. Source: KPMG Switzerland.

Figures in percent


Jura

Obwalden

Zug

Appenzell I.

Nidwalden

Uri

Schwyz

Appenzell A.

Glarus

Grisons

Thurgau

St. Gallen

Aargau

Solothurn

Fribourg

Valais

Basel-Stadt

Zurich

Neuchâtel

Ticino

Bern

Vaud

Basel-Landschaft

Geneva

20

Note: max. income tax rates for single taxpayers with no children and no religious denomination living in the respective cantonal capital. Income tax figures for AI, GL, OW, SG and UR for 2018. Source: KPMG Switzerland.

Income tax rates in the cantons – trend 2007 to 2019Following two years without change in the average maximum tax rates, the figure has decreased slightly but remains stable.

– 0.96%

33.96% 33.96%

34.61%34.85%

34.05%34.25%

33.76%33.84% 33.86%33.77%33.99%33.98% 33.89%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


21

41.0241.77

Ticino

36.8434.38Aargau

32.9532.18Grisons

32.5531.16Lucerne

25.2031.89Schaffhausen

26.1424.86

23.1022.38

24.0124.30

26.7425.55

33.0025.35

25.1927.53

31.2630.74

34.4931.56

35.6332.48

36.1633.52

36.4733.97

36.3336.02

37.0036.50

38.9137.36

39.3438.09

40.1639.76

43.5440.15

41.2841.27

41.5041.50

42.5542.17

44.7644.75

Note: max. income tax rates for single taxpayers with no children and no religious denomination living in the respective cantonal capital. AI, GL, OW, SG and UR: income tax rates for 2018. Source: KPMG Switzerland.


2007

2019

Figures in percent

Income tax rates in the cantons – trend 2007 to 2019The cantons of central Switzerland have occupied the top spots in the tax attractiveness ranking for over a decade. Various cantons of eastern Switzerland have reduced their income tax rates, while Obwalden, Schwyz and Schaffhausen have increased theirs. There has been very little movement in the higher tax cantons over the last 12 years. Neuchâtel, Bern, Vaud and Geneva have maintained the same rates for this entire period.

Appenzell I.

Obwalden

Zug

Nidwalden

Uri

Schwyz

Appenzell A.

Glarus

Thurgau

St. Gallen

Solothurn

Fribourg

Valais

Basel-Stadt

Zurich

Neuchâtel

Jura

Bern

Vaud

Basel-Landschaft

Geneva

22

Income tax rates in the cantons – trend 2007 to 2019The 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.

Note: max. income tax rates for single taxpayers with no children and no religious denomination living in the respective cantonal capital. AI, GL, OW, SG and UR: income tax rates for 2018. Source: KPMG Switzerland.

Geneva

Vaud

Basel-Stadt

Bern

Zurich

AargauSwiss averageSt. Gallen

Schwyz

Zug

Obwalden

Thurgau

Nidwalden

Neuchâtel

LucerneSchaffhausen

50%

45%

40%

35%

30%

25%

20%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


23


Individual income tax rates in the cantons 2019

24

Cantons with an individual income tax rate below the Swiss average (33.89%)

Figures in percent

Cantons with an individual income tax rate above the Swiss average (33.89%)

40.2Jura

36.5Valais

41.3Bern

34.0Solothurn

41.5Vaud

42.2Basel-Landschaft

34.4 Aargau

37.4Basel-Stadt

31.2 Lucerne

24.3Obwalden

44.8 Geneva

39.8Zurich

31.9 Schaffhausen

32.5 Thurgau

30.8 Appenzell A.

24.9 Appenzell I.

25.6 Nidwalden

25.4 Uri 32.2

Grisons

33.5St. Gallen

31.6 Glarus

27.5 Schwyz

22.4 Zug

40.8Ticino

38.1Neuchâtel

36.0Fribourg


25

34.05 | 34.38Aargau

32.00Poland

- 0.48

31.17 | 31.16Lucerne

30.48 | 30.74

24.86

28.21 | 27.53

25.35

36.50 | 25.55

24.30

Appenzell A.

Appenzell I.

Obwalden

Nidwalden

Uri

Schwyz

31.56Glarus

22.86 | 22.38

35.00

35.00

34.18 | 33.97

33.52

32.48

32.29 | 31.89

32.18

20.00

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). Lithuania recently increased its tax rates to – a still competitive – 20%. Most of the Swiss cantons compare to the European average when it comes to top income tax rates. Tax rates in Europe are generally stable, with the significant decrease in Nidwalden a striking exception.

31.40

22.00

20.00

20.00

18.00

15.00

10.00

- 0.01

Max. income tax rates for single taxpayers with no children and no religious denomination living in the respective cantonal capital. Hungary and Ukraine: income tax rate for 2018. 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.


Luxemburg

The Netherlands

Finland

Cyprus

Grisons

Schaffhausen

Thurgau

Solothurn

Turkey

St. Gallen

Guernsey

Romania

Hungary

Ukraine

Estonia

Jersey

Czech Republic

Zug

Latvia

10.00Bulgaria

- 10.95

- 0.68

+ 0.26

- 0.40

35.00Malta

- 0.21

+ 0.33

2019


Figures in percent

26

40.72 | 41.77

48.00

46.60 | 38.20

46.24Iceland

Norway

Portugal

48.00Ireland

53.75

51.95 | 51.75

50.00

50.00

45.78

57.34 | 57.19

55.00

45.00

45.00

45.00

44.75

43.00

42.17

41.50

41.27

40.46 | 40.15

39.76

39.33 | 38.09

37.43 | 37.36

36.50

2019


Figures in percent

45.00

55.85 | 55.89

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.

+ 0.04

Luxemburg

Belgium

Slovenia

The Netherlands

Finland

Bern

Valais

Basel-Stadt

Neuchâtel

Zurich

Jura

Vaud

Ticino

Basel-Landschaft

Italy

Geneva

Germany

UK

Spain

Austria

Denmark

Sweden

Greece

- 8.40

- 0.15

- 0.20

Individual income tax rates are especially high in western Europe and Scandinavia. The Netherlands and Sweden once again reduced their rates slightly, while Denmark implemented a small increase. On average, tax rates across Europe have been stagnating in recent years, however.

36.02Fribourg

- 0.07

- 1.24

- 0.31

+ 1.05


27

20.00 30.00Jordan

45.00 45.00Australia

28.00 28.00

15.00 15.00

Non-european comparison (selected countries)The well-known offshore domiciles as well as several states in the Middle East remain committed to their zero income tax policies. Countries like South Africa, Australia, China and Japan have very high tax rates by global standards. Only in Jordan was there a significant hike in income tax rates (from 20% to 30%).

0.00

13.00 13.00

27.50 27.50

30.00 30.00 33.00 33.00 33.96 33.89 35.88 35.88 37.00 37.00

45.00 45.00

45.00 45.00

55.95 55.95

Max. income tax rates for single taxpayers with no children and no religious denomination living in the respective capital. New Zealand and Bermuda: income tax rates for 2018. 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.

22.00 22.00

2018

2019

Figures in percent 0.00

0.00

0.00

0.00

0.00

0.00


Malaysia

Hong Kong

Bahamas

Bahrain

Bermuda

Cayman Islands

Oman

Qatar

UAE

Russia

Brazil

Indonesia

New Zealand

Swiss average

India

USA

South Africa

China

Japan

Singapore

28

25.00+ 5.00Jordan 30.00

45.00

39.00 45.78+ 6.78Luxembourg

30.00 35.00+ 5.00

43.00 45.00+ 2.00

Cyprus

Spain

25.00 31.40+ 6.40Latvia

45.00 36.00

- 8.00

Croatia

16.00 15.00-1.00Hong Kong

24.00 10.00- 14.00Bulgaria

40.00 45.00+ 5.00

40.00

18.00 20.00

45.00 45.00

35.00 37.00

41.00 48.00

+ 5.00

+ 2.00

0.00

+ 2.00

+ 7.00

- 0.96 34.85 33.89

Trend: countries 2007 – 2019Following the introduction of flat rate taxes, the income tax rates for the highest earners have fallen massively in central Europe over the past 12 years. Rising top income tax rates can be observed in northern Europe, Luxembourg and the Mediterranean in particular.

36.00 15.00

27.00 20.00

32.00 22.00

40.00 32.00

59.00 55.89

28.00 28.00

35.70 46.24

- 21.00

- 10.00

- 9.00

- 7.00

- 3.11

0.00

+ 10.54

Max. income tax rates for single taxpayers with no children and no religious denomination living in the respective capital. Hungary: income tax rates for 2018. 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.

2007

2019

Figures in percent

Greece

UK

Isle of Man

Germany

USA

Ireland

Swiss average

Hungary

Lithuania

Czech Republic

Poland

Denmark

Malaysia

Iceland


29

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“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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12Key findings Read the results of KPMG’s cyber security survey 2018

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162018 activity and 2019 outlook An industry-by-industry look at last year’s deals and what you might expect over the next 12 months.

22Private Equity and the Swiss economy SECA’s General Secretary shares hisinsights into how Private Equity makes the Swiss economy stronger.

76Detailed 2018 transaction list View the M&A deals that involved a Swiss buyer, seller or target.

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Clarity on Performance of Swiss Private Banks

0.430

0.384

0.103

0.499

0.274

0.199

0.693

0.184

0.294

0.793

0.193

0.558

0.430

0.384

0.103

0.499

0.274

0.199

0.693

0.184

0.294

0.793

0.193

0.558

RecoveryPerformanceBooming equities AuM up Cost control Strategy

0.4990.274

0.1990.693

0.1840.294

0.7930.193

0.558

0.4300.3840.103

0.4990.274

0.1990.6930.184

0.2940.7930.193

0.558

Jan0

50

100

Feb Mar Apr May Jun Jul Aug Sep Okt Nov Dez

Clarity onPerformance of Swiss Private BanksRecovery of a divided industry

August 2018

17Industry performance Bull markets drove significant increases in Assets under Management and profits, but Net New Money continues to disappoint.

32Median bank insights While the industry is recovering amid positive markets, the weaker half of banks still struggled to improve RoE and Cost-income ratio.

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