The taxation of a corporation (AG or GmbH) always raises questions. This is because taxation works in a fundamentally different way than it does for individuals or even sole proprietorships. In the following blog post, we would like to briefly explain the basics of the taxation of corporations.
Anyone who sets up a corporation must first and foremost be aware that it is an independent taxable entity. In fact, corporations are legal entities and thus receive their own legal personality. A separate tax return must therefore be completed. At federal and cantonal level, corporations are subject to profit tax and at cantonal level to capital tax. The tax subject for profit tax is the net profit and for capital tax the equity capital.
Difference to partnerships
The fundamental difference to partnerships (sole proprietorship or general partnership) is the economic double taxation. This means that in the case of a corporation there are two taxable entities. On the one hand there is the corporation itself and on the other hand there are any shareholders. In concrete terms, this means that the profits of a corporation are first taxed at the company as profit tax and later, when distributed, at the shareholders as income. At the cantonal level, the capital is also subject to capital tax at the level of the company and to wealth tax at the level of the shareholders.