Taxes on the sale: what you'll actually keep

Sale of sole proprietorship: single tax on liquidation profit

For sole proprietorships and individual businesses, the sale triggers a tax on the liquidation profit. This profit corresponds to the difference between the sale price and the tax value of the business.

Switzerland applies a preferential tax regime: the liquidation profit is taxed separately from ordinary income, at a reduced rate. This separation avoids excessive tax progression.

The effective rate combines direct federal tax (maximum 11.5% after reduction) and cantonal and municipal taxes. Cantons apply variable reduction coefficients, creating significant differences.

In 2025, depending on the canton, the overall liquidation profit tax rate varies between 2% and 12%. This difference can represent tens of thousands of francs on the same transaction.

Calculation formula:
Liquidation profit = Sale price - Tax value
Tax = Liquidation profit × Effective cantonal rate

Tax rates by canton

The effective liquidation profit tax rates vary considerably across cantons in 2025:

• Zug (ZG): ~2-3% (most favourable)
• Schwyz (SZ): ~3-4%
• Obwalden (OW): ~4-5%
• Zurich (ZH): ~6-8%
• Vaud (VD): ~7-9%
• Geneva (GE): ~9-11%
• Bern (BE): ~8-10%
• Valais (VS): ~6-8%
• Ticino (TI): ~7-9%

These differences are explained by cantonal tax policies and the reduction coefficients applied. Municipalities also influence the final rate.

For a sale at 1 million CHF, the difference between Zug and Geneva can reach 80,000 CHF in taxes.

Detailed calculation example

Practical case: sole proprietorship in the canton of Vaud

Data:

• Sale price: 800,000 CHF
• Tax value: 200,000 CHF
• Liquidation profit: 600,000 CHF
• Effective VD rate: 8%

Tax calculation:
600,000 CHF × 8% = 48,000 CHF

Net amount received:
800,000 CHF - 48,000 CHF = 752,000 CHF

This amount represents what the seller actually keeps after taxes. In a canton like Zug (3%), the tax would be 18,000 CHF, leaving 782,000 CHF net.

The 30,000 CHF difference illustrates the importance of the strategic choice of canton.

Sale of limited company (SA) or Sàrl: capital gains taxation

The sale of shares or stock follows a different tax regime. In Switzerland, for individuals, capital gains on private assets are generally exempt from tax.

This principle applies if you hold your shares in your private assets and are not considered a professional trader.

Exemption conditions:

• Held in private assets (not commercial)
• No professional trading activity
• No quasi-trader criteria

This exemption represents a major tax advantage: selling an SA or Sàrl for 2 million can generate zero tax on capital gains, unlike a sole proprietorship.

Beware of special cases: If the shares are held in commercial assets or if you are qualified as a trader, the gain becomes taxable as income.

Withholding tax on dividends and liquidation

Upon liquidation of an SA or Sàrl, a 35% withholding tax is deducted at source on distributions (dividends, liquidation surplus).

For Swiss residents, this tax is recoverable via the annual tax return, provided income is correctly declared. Recovery occurs 12 to 18 months after the transaction.

Impact on cash flow: If you receive 1 million in liquidation surplus, 350,000 CHF are withheld immediately. You must therefore plan for this temporary immobilisation.

For non-residents, recovery depends on double taxation agreements between Switzerland and the country of residence. Without an agreement, the withholding tax can become definitive.

This mechanism requires coordination with a tax specialist to optimise timing.

Special cases: commercial assets vs private assets

The distinction between private assets and commercial assets determines whether capital gains are taxable or exempt.

FTA criteria for qualifying commercial assets:

• Shareholding exceeding 20% of capital
• Holding period less than 5 years
• Significant debt financing
• Professional activity linked to the company
• Frequent transactions

If several criteria are met, the FTA can reclassify your shares as commercial assets. The gain then becomes taxable as income, with rates reaching 40-45%.

On a 2 million sale with a 1.5 million gain, the difference between exemption (0 CHF) and taxation (600,000 CHF) is considerable.

This qualification must be anticipated from acquisition to avoid unpleasant surprises.

Tax simulator: calculate your actual tax

Accurately estimating your tax burden requires considering several key variables:

Essential variables:

• Legal structure (sole proprietorship, SA, Sàrl)
• Canton of tax domicile
• Sale price and tax value
• Holding period
• Nature of assets (private or commercial)

For a sole proprietorship, multiply your liquidation profit by the cantonal rate. For an SA/Sàrl, first check whether your shares are in private assets.

Each situation is unique. Online calculators provide estimates, but an accurate tax simulation requires the expertise of a tax specialist.

The Leez partner network includes tax experts who can perform this simulation and identify possible optimisations before the sale.

Legal strategies to optimise taxation

Tax optimisation of a business transfer is planned over 5 to 10 years. Several legal levers exist:

Temporal planning: Choosing the timing of the sale according to changes in cantonal rates and your personal situation (retirement, other income).

Legal structuring: Transforming a sole proprietorship into an SA can enable you to benefit from capital gains exemption, if anticipated early enough.

2nd pillar buy-backs: Making buy-backs into your pension fund before the sale reduces your taxable income and optimises your retirement assets.

Staggering: Spreading the sale over several tax years can limit tax progression.

These strategies require methodical preparation with experts. Starting too late drastically limits available options.

Payment staggering and tax impact

Payment staggering (earn-out, deferred payment) allows the sale price to be spread over several years.

Tax impact: Depending on the canton, this approach can spread the tax burden over several periods, reducing progression and optimising the effective rate.

Advantages:

• Smoothing of tax burden
• Adaptation to buyer's payment capacity
• Potential reduction of marginal rate

Risks:

• Risk of future non-payment
• Increased administrative complexity
• Dependence on future business performance

This option must be evaluated with a tax specialist and integrated into the sale agreement.

Costly tax mistakes to avoid

Certain tax mistakes can cost tens to hundreds of thousands of francs:

1. Lack of planning: Selling without tax preparation often doubles the tax. An entrepreneur who sold without advice paid 180,000 CHF instead of 90,000 CHF with optimisation.

2. Ignoring cantonal differences: Not considering a strategic relocation can cost 50,000 to 100,000 CHF on a significant sale.

3. Incorrect private/commercial assets qualification: Reclassification by the FTA transforms an exemption into full taxation.

4. Forgetting withholding tax: Not provisioning for the 35% creates immediate cash flow problems.

5. Absence of expert: Attempting to optimise alone often leads to costly errors.

Consult our guide on common mistakes in business transfers to secure your transaction.

The taxation of a business sale in Switzerland varies significantly depending on legal form and canton. For a sole proprietorship, liquidation profit is taxed at a reduced rate, whilst an SA or Sàrl often benefits from total exemption on capital gains. Cantonal differences can represent several tens of thousands of francs on the final amount.

Legal optimisation strategies exist: multi-year planning, transformation of legal structure, income staggering. But they require time and specialist support. Tax mistakes are costly: incorrect gain qualification, forgotten provisions, poorly calculated timing.

Before beginning your transfer, two steps are essential: accurately value your business and consult a tax expert. Estimate your business value for free to obtain an initial calculation basis, then contact a specialist to build a tax strategy adapted to your situation. On Leez, our network of tax partners can support you in this process.