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Save Taxes in Switzerland: Strategic Optimization with Three Companies

2024-12-03 16:29
Switzerland offers an ideal environment for entrepreneurs looking to optimize their tax burden. By implementing a smart corporate structure, you can further reduce your tax liabilities through invoicing and licensing between three companies. This method allows you to strategically distribute profits, claim operating expenses, and leverage tax advantages through strategic location selection.
In this article, we’ll show you how to implement this model with three companies and what to consider to comply with legal requirements.

The Strategy: How Three Companies Work Together

The core principle is that each of the three companies assumes a specific role:
  • Company A
  • Location: Canton with a low tax rate
  • Function: Provides services or holds rights (e.g., patents, trademarks, or technologies) that can be licensed to Company B and C.
  • Company B
  • Location: Centrally located canton with a moderate tax rate
  • Function: Operates the business, generates revenue, but deducts operating expenses through invoices from Company A.
  • Company C
  • Location: Canton with attractive tax policies for wealth management
  • Function: Acts as a financial holding or management company that channels and optimizes profits from licenses and invoices.
Through the collaboration of these companies, income and expenses can be strategically distributed to minimize the overall tax burden.

Invoicing Between Three Companies

Example:
  • Company A develops a software solution and holds the rights to it.
  • Company B uses this software for its operations and pays licensing fees to Company A.
  • Company C invoices Company B for administrative services (e.g., accounting, HR).
Advantages:
  • Company A pays taxes on the licensing fees in a low-tax canton.
  • Company B deducts both the licensing fees and the administrative costs invoiced by Company C as operating expenses.
  • Company C manages the profits and benefits from a low tax burden in a canton with attractive tax policies for wealth management.

Licensing as a Lever for Tax Optimization

Licensing processes, trademarks, or technologies is an effective way to shift revenue:
  • Company A holds the rights to patented technology or a brand.
  • Company B and C pay licensing fees to use these rights.
By strategically locating Company A in a low-tax canton, licensing fees can be taxed at a much lower rate, while Company B and C can deduct the costs as business expenses.

Advantages of the Three-Company Strategy

1 Maximum Tax Savings
  • Through the targeted allocation of profits to cantons with lower tax rates.
2 Efficient Use of Operating Expenses
  • Licensing and administrative fees reduce the taxable income of the operational company.
3 Flexibility and Control
  • With three companies, you can distribute income and expenses even more precisely.
4 Legally Compliant Tax Optimization
  • When market-based pricing and proper documentation are in place, this strategy remains legal and transparent.

Key Points for Implementation

1 Market-Based Pricing
  • Invoicing and licensing fees must align with market conditions. Inflated or artificial prices could be considered tax evasion.
2 Documentation
  • Keep detailed records of all transactions and agreements to prepare for any potential tax audits.
3 Legal Advice
  • Work with tax experts to ensure all measures comply with legal requirements.
4 Transparency
  • The structure must be understandable and economically justified.

Conclusion: Tax Optimization with Three Companies – Your Advantage in Switzerland

Using three companies in Switzerland offers significant advantages for tax optimization. By strategically invoicing and licensing, you can reduce your tax burden while complying with legal requirements. This method is especially attractive for businesses covering various operations or engaging in international activities.
Deindomizil supports you in establishing and managing your companies in Switzerland. With our expertise, we help you implement your tax strategy and maximize the benefits of your corporate structure.
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Start optimizing your taxes with a well-planned corporate structure today!