Marginal Tax Burden

This is an analysis, which will only be published for the 15 project sponsoring cantons, the Swiss neighboring countries, as well as the most tax-attractive and least tax-attractive locations.

 

In the BAK Taxation Index, the EATR tax burden (i.e., effective average tax rate) for a profitable investment is the central factor under consideration. The EATR tax burden is the decisive criterion for corporations when selecting a location. However, of far greater interest for a company already domiciled at a location is the EMTR tax burden (i.e., effective marginal tax rate), in other words, the tax burden for a (small) additional investment. A below-average EMTR means that additional investments for local corporations are relatively inexpensive at this location in terms of taxes.

 

  • EATR: measure for location attractiveness. This dimension influences a corporation’s decision about where to locate the enterprise.

  • EMTR: measure for the scope of investment. This determines how much new investment is undertaken by an enterprise already domiciled at a location.

 

2017 Marginal Tax Burden for Corporations

Note: EMTR tax burden (i.e., effective marginal tax rate) measured in a cantonal (Swiss locations) or commercial capital of a country (international locations).
Source: ZEW / BAK Economics

     

  • The EMTR tax burden among the major cities surveyed in the 2017 BAK Taxation Index ranges from 0.0 percent in Hong Kong to 39.6 percent in New York. The BAK Taxation Index average is at 23.8 percent.

  • Most of the Swiss cantons stand out through very low effective average tax rates. Appenzell A. Rh. and Graubünden, with 1.6 and 1.8 percent, have the lowest national rates and rank directly behind the international leader (Hong Kong). Genève (14.5 percent) is at the other end of the spectrum of Swiss cantons, although this urban canton still scores well when compared with the BAK Taxation Index average (23.8 percent).