Lucerne: Lowest corporate taxes in Switzerland

In recent years, the city of Lucerne has massively reduced corporate taxes. The goal was to attract as many companies as possible to Central Switzerland and make the location more attractive.

Tax-Attractive Location

Due to the tax reductions for companies, the city of Lucerne has become very attractive. Since the canton of Lucerne also revised its tax laws during the same period, the city of Lucerne can now be compared with the most tax-favorable municipalities in the canton of Zurich in terms of top tax rates. Thus, in terms of taxation, Lucerne is now also comparable to the surrounding cantons in Central Switzerland, almost all of which have a tax policy interesting for companies.

The intention was to be able to more than compensate for the expected tax losses through the influx of new companies. Despite the tax reductions, revenues have remained roughly constant.

Negative Impacts

The tax reductions could not meet all expectations. Although there has been a strong influx of companies, these still do not employ many people. Also, the influx of larger firms is difficult because there are not enough land reserves. The debt of the city of Lucerne is about the same as it was ten years ago.

Outlook

Despite the massive reduction of corporate taxes, Lucerne can still perform its state functions. Today, the city is financially healthy and is no worse off than before the tax reductions. However, this also required certain cost-cutting efforts. Nevertheless, Lucerne's approach can be considered a success. Thus, Lucerne is also a suitable location for young entrepreneurs to start a company.

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