IPrime Anwaltskanzlei Zürich Balmer Etienne Treuhand
The Swiss Patent-Box

Tax relief for qualifying research and development

Introduction of a special tax relief

In addition to the patent box, the TRAF authorises the cantons to introduce a special tax relief for qualifying research and development at the level of cantonal and municipal taxes (this option is not available at the level of direct federal taxes). The special tax relief creates an attractive environment for Switzerland as an innovation center. In principle, the special relief is restricted to (qualifying) R&D activities "physically" being performed in Switzerland (research abroad is not eligible for special relief). The special tax relief shows its effects on the costs (so-called "input promotion") and is in principle accessible to legal entities (such as companies limited by shares or limited liability companies) as well as to self-employed natural persons. However, it is important that the taxpayer is well and sufficiently documented with a view to the information required for the patent box ("tracking and tracing").

Approach to the special tax relief

Specifically, the new instrument of special tax relief for qualifying research & development provides that, in addition to the actual (qualifying) commercially justified expenses incurred, a special tax relief may be granted for

  • one's own (directly attributable) staff costs for R&D, plus a lump sum surcharge of, as a matter of principle, 35% on such staff costs - for the compensation of other costs (such as costs of materials, rent, electricity, etc.); and
  • 80% of the invoiced R&D costs to the extent that such expenses were incurred by third parties or group companies in Switzerland (contract research). However, if the principal is already entitled to a relief, the agent is no longer entitled to any relief for its research and development.

The amount of the special tax relief is, within the statutory limits, to be defined independently by each canton. The cantons may allow for a special relief amounting to a maximum of one and a half times (i.e. a tax "surcharge" of up to 50%). From a tax perspective, the special relief reduces the basis for the tax assessment. Hence, the special relief has no direct impact on the profit reported in accordance with commercial law.

Cantonal limitation of tax relief

The special tax relief for qualifying R&D, too, is one of the measures that must be considered in the context of (cantonal) limitations of the tax relief, which is equally to be set up through the TRAF and which is to guarantee a certain minimum taxation.


The taxpayer must apply for the special tax relief for research and development.