SWITZERLAND Law and Practice Contributed by: Philippe Nordmann, Marion Bähler, Dario Glauser, Christian Hagen and Samuel Lieberherr, Walder Wyss Ltd
• neither Swiss citizens nor holders of a perma - nent residency permit nor married to a Swiss citizen, Social security contributions The employer′s portion of 5.3% is to be paid directly by the employer in addition to the gross salary (from which the employee′s portion of an additional 5.3% is deducted and directly paid to the social security authority by the employer). Occupational pension contributions As with employees, these contributions are usu - ally split 50:50, with at least 50% being borne by the employer. Unemployment insurance contributions As with employees, these contributions are usu - ally split 50:50, with at least 50% being borne by the employer. Occupational and non-occupational accident insurance contributions Occupational accident insurance is mandatory for all employees working in Switzerland and must be borne by the employer. Contributions depend on the individual insurance contract. With regard to non-occupational accident insur - ance, the situation is the same as for employees, as described in the foregoing. Daily sickness benefits insurance contributions As with employees, these contributions are usu - ally split 50:50, with at least 50% being borne by the employer. Family allowance contributions Family allowances (child and education allow - ances as well as, depending on the canton, birth and adoption allowances) are paid by the employer to entitled employees, for which the
employer is reimbursed by the competent com - pensation office. Family allowance contributions are mainly borne by the employer based on a percentage of the salary and depend on the can - ton, economic sector and relevant family allow - ance section at the competent compensation office (usually between 0.7% and 3.5% of the annual gross salary). 5.2 Taxes Applicable to Businesses Corporate Income Tax As is the case for individuals, corporate income tax is levied at the federal, cantonal and munici - pal levels: • on worldwide net income from all sources in Switzerland in case of a tax resident legal entity, including companies, co-operatives, associations and foundations (so-called unlimited taxation); or • on net income earned in Switzerland in case of a non-tax resident legal entity (limited taxa - tion). A legal entity is considered a tax resident if (i) its statutory seat or (ii) its place of effective man - agement is located in Switzerland. Income from enterprises and permanent estab - lishments or real estate outside of Switzerland is exempt from unlimited (corporate) taxation. Effective corporate income tax rates depend on the canton and the municipality and vary from approximately 12% to 21%. Tax losses may be carried forward and offset against income for the following seven years. Dividends are subject to participation relief in case of participation of at least 10% of the nominal share capital or reserves or a fair market value of the participation of at least CHF1 mil -
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