The Swiss Patent Box

Companies with R&D units or owning patents can use and benefit from the Swiss patent box

The Swiss patent box offers companies subject to Swiss taxes an attractive option within the local research site. Research and development costs as well as income from Swiss or foreign patents enjoy privileged tax treatment.

Companies domiciled in Switzerland now have the opportunity to benefit from tax advantages in connection with the so-called patent box or with taxes on R&D expenses. According to the Federal Council's press release of 14 June 2019, the corresponding law will enter into force on 1 January 2020.

What is at the core of the Swiss patent box: Upon a taxable person's or company's request, the net profit resulting from patents or income from patents, respectively, is taken into account in the ratio of qualifying R&D expenses to total R&D expenses per patent for the calculation of the taxable net profit. This may result in a reduction in income of up to 90%, entailing corresponding tax advantages. In order for patents to be taken into consideration for the box, they must relate to research and development activities (nexus approach) and, in accordance with OECD guidelines, they must be novel, useful and non-obvious.

Additionally, up to 150% of the explicit commercially justified R&D expenses incurred, directly or indirecty via third parites, by a taxable person or company in Switzerland may be deemed deductible. In Switzerland, the comptence lies with the cantons, which may grant their approval upon request.

You will find in-depth background information relating to Patent Boxes in Switzerland on our information platform jointly offered with Balmer-Etienne (trust, examination, advice)..