Shareholder Taxation

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.


The regionally different tax situation of corporations is primarily measured in the BAK Taxation Index for corporations. In the following special evaluation of shareholder taxation, the investor perspective is included and the capital costs for investments in companies is analyzed. Within this evaluation, the central question is to what extent the tax treatment of an investment in a company differs from a random investment through the capital markets. The resulting outcomes show whether investments in a company are better or worse in terms of taxation when compared to capital market investments.  

In this calculation, a real, pre-tax return from the capital market investment is assumed to be 5.0 percent. The resulting evaluation shows how high the pre-tax return of a company investment must be in order to achieve the same after-tax return as the capital market investment. All locations, in which this pre-tax return is lower than 5.0 percent, give preferential treatment to company investments in terms of taxes when compared to other investment possibilities in the capital market.

However, the evaluation only enables us to draw limited conclusions about the taxation attractiveness of a specific location. The different tax tariff inputs influence both the taxation of the capital market investment as well as the company investment. Therefore, the results of this evaluation only reveal the relative balance between the different investment possibilities at a specific location.


Shareholder Taxation 2017


Notes: Pre-tax return from a corporate investment, which results in the same after-tax return as an investment in the capital markets of 5.0 percent. Measured in cantonal (Swiss locations) or commercial capitals of a country (international locations).
Source: ZEW / BAK Economics


  • In the average of all 2017 BAK Taxation Index locations (grey column), corporation investments are clearly disadvantaged in terms of taxes compared with other financial investments in the capital markets. Investments in a corporation require a pre-tax return of 6 percent in order to have a comparable after-tax return as a capital market investment.

  • The results for the BAK Taxation Index project sponsors show that in the Swiss cantons the result is contrary to this finding: In all of the cantons surveyed, the return needed for corporate investments is below 5.0 percent. In the Swiss leader, Bern, the return is at 4 percent.

  • With the exception of Belgique/België, Switzerland’s neighboring countries all disadvantage investments in corporations compared to capital market investments.

  • In New York, which has the highest EATR tax burden on corporations, a significantly higher pre-tax return of 7.8 percent is necessary.