Taxation in a stock corporation or limited liability company

In the taxation of a joint-stock company (AG) and the taxation of a limited liability company (GmbH), there are several points to consider.

Taxation for legal entities

The taxation of an AG or a GmbH, both of which are legal entities, follows different principles than those applicable to a sole proprietorship. For the GmbH/AG, taxation occurs at various levels. On one hand, the company as a legal entity is taxed, and on the other hand, the respective shareholders as natural persons are taxed. Since both the company and the shareholder are taxed, there can be instances where taxes are paid twice. This situation is referred to as economic double taxation. Such dual burden can occur, for example, with the distribution of dividends. At the end of the year, a joint-stock company has to pay tax on the net profit it has earned. If it then distributes a dividend, that amount is taxed again at the level of the shareholder in the form of income.

A legal entity has to pay direct federal tax on its profit at the federal level (profit tax). At the level of canton and municipality, in addition to the cantonal profit tax, a capital tax is also added. Additionally, in most cantons, a church tax is also payable by the company. A company cannot leave the church. Depending on the canton and municipality, the amount of taxes and calculation methods can vary significantly. A comparison can be financially worthwhile.