Is there a capital gains tax for corporations (AG) and limited liabilities companies (GmbH)?

Hello guys, I’ve heard there is no capital gains tax in Switzerland for natural persons. But what about corporations and companies? If AG or GmbH buys some stock today for 100 chf and sells it tomorrow for 200 chf, will those 100 chf of profit be taxed or not? Does it have to be reported in annual tax returns or not?

The principle is that there IS a capital gain tax in Switzerland.

The exception to that principle is that there is no tax in your private wealth.

All profits you make in an AG or GmbH have to be taxed. In your example, you made CHF 100.- profit which have to be taxed. But as a company, you can also list all deductions (e.g. laptop bought, rent etc) in your annual financial statement. Depending on your expenses, you might end up not having to pay profit taxes, if you spend more than you earned.

Every transaction you make, be it profit from selling stocks, invoices for work you did, has to be accounted in a company. So you have to report it.

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My question really is whether I should invest in stock market through my company or as a natural person? What is better tax-wise?

If companies are taxed on capital gains and natural persons are not, than the answer is clear - invest as a natural person, correct?

I spoke to a financial advisor about this a few years ago because I also had this ‘great’ idea and even got it all set up via CornerTrader for my GmbH. However for tax purposes, it is better to invest as an individual (unless this/trading is your core business) where you are taxed on dividends, not on capital gains (for shares). Either way the company’s assets are part of your wealth tax. I am sure I am dumbing this down for simplicity and hence somebody on this forum is likely to provide more detail to you . . .

@SwissChalet already summarized most of the information

You have to view the whole picture. If you just want to buy stocks and sell them at a later stage, it’s most probably better to buy as a natural person.

Exceptions are:

  • day-trading or weekly trading of stocks
  • high volume of trades during the year, compared to mostly buy&hold
  • frequent trading with options and/or futures

E.g. you are buying 100 stocks of company A, and sell the stocks again two days later for 25% gain. If this is done infrequently over a year, and the capital gains are not really high, most probably the government tax office will not bother. Still, you are breaking the rule of holding securities less than 6 months. So there is a possibility that the tax office will classify you as a professional trader.

This is something people should also be aware. The company’s assets are part of your wealth tax. The tax office will do an assessment procedure (Veranlagungsverfahren) and will check the value of your company. So if you trade using a company, you have to pay taxes on: a) profit for the company and b) salary (where you have to deduct AHV/IV/EO) or dividends (no AHV/IV/EO - but it’s counted as an asset). You are basically paying double taxes.

As a rule of thumb: if you’re not trading frequently and your not trading derivatives, it’s better to invest as a natural person. If you are trading a lot, it’s better to do it over company. You are paying more taxes though in the 2nd case.

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OK, it seems investing in the stock market long-term (for example for your after-retirement life) is better if done as a natural person and not as a company.

I can think of some exceptions though :slight_smile:

E.g. wouldn’t wrapping US assets in a company avoid having to pay US estate tax (because it’s the company that would be inherited, not the US assets).

(but for most people I doubt it’s worth it)

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Just to add: For tax purposes (which is independent of a potentially different general accounting standard you might use) you don’t have to value your shares or securities at market value. You therefore only necessarily will be taxed on realized gains. If you are a buy-and-hold investor, you can buy endlessly and never pay taxes. See OR Art 960 to 960b (SR220).

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Quite sure the wealth tax still applies on market valuations.

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