Partnerships

While corporations as legal entities receive their own legal personality and are thus taxed as separate tax subjects, there are companies that are not taxable as such. This includes individuals and partnerships or limited partnerships.

Basis

Sole proprietorships, partnerships, and limited partnerships are not legal entities and therefore are not liable for corporate taxes. Each sole proprietor and partner must therefore tax their private and business assets as a whole and not separately.

The income of sole proprietors and partners consists of their proceeds from the company and other income and is taxed at the federal, cantonal, and municipal levels. The proceeds from the company consist of company profits, paid wages, and received interest. Any losses of the company as well as production costs can be offset against the income of the sole proprietors and partners.

The business assets are allocated to the sole proprietors proportionally like income. However, private and business assets are only subject to cantonal and communal taxes.

Depreciation & Provisions

Expenditures of the company can be deducted from income. It should be noted that investments (vehicles, machinery, etc.) can only be deducted as expenditures spread over several years in the form of depreciation. The depreciation rates vary and are between 3% and 45% annually. Depending on the type, provisions for possible risks can also be deductible.

Losses

Losses from the seven preceding business years can be deducted from the taxable income, provided they were not already considered in the calculation of the taxable income of previous years.

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