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Place of taxation of brokerage commissions

13 December 2018

Place of taxation of brokerage commissions


The new version of Article 21 the Cantonal and Communal Income Tax Harmonisation Act (CCITHA) will enter into force on 1 January 2019. It deals with the taxation of brokerage commissions realised by legal entities outside their home location.

Until now Article 21 paragraph 2 (b) of the CCITHA only dealt with tax issues for legal entities located abroad. For companies located in Switzerland, and in the absence of clear legal basis, the Federal Court had ruled that brokerage commissions must be taxed in the canton where the real estate was located, similar to an individuals taxation.

Legislator has now rectified the situation by introducing in the Harmonisation Act a specific article. The place of taxation of brokerage commissions, for both individuals and legal entities, is now clear and depends on the broker’s place of domicile/seat.

According to the new wording of Article 21 paragraph 2 (b) CCITHA, brokerage commissions are taxed as follows:

Swiss companies

Legal entities in Switzerland will be taxed on the brokerage commission at the place of the company location, regardless of the real estate property location.

Foreign companies

For legal entities located abroad, the place of taxation is where the real estate stands. The brokerage commission creates an economic connection with Switzerland.

The modification of the Cantonal and Communal Income Tax Harmonisation Act leaves no doubt as the interpretation; the place of taxation for brokerage commission is now very clear.


This article was written by Laure Cordt-Møller. For more information please contact Laure on +41 (0)22 591 18 90 or by email - Laure.Cordt-Moller@crsblaw.com

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