The canton of Zug is adjusting its tax law as of 1 January 2020 because the privileged taxation for holding, domicile and mixed companies must be ceased. On 27 June 2018 the parliament approved the partial revision in second reading by 54 votes to 18 without discussion. With this package the canton wants to remain an attractive location for companies. The average tax burden on previously standard-taxed companies is falling in the course of the partial revision of currently around 14.5 percent to about 12 percent.
Due to the tax law changes at cantonal and federal level, there are also tax planning opportunities. Companies with a previous holding, domiciled or mixed company status can benefit from reduced taxation at the end of 2019 by uncovering hidden reserves, including self-added value for this part. Companies with research and development expenses or patents can now benefit from further reduced taxation. For standard-taxed companies the timing of profit realisation in 2019 or 2020 can lead to tax advantages or disadvantages. Also, the distribution of a dividend in 2019 is to be analysed, since the taxation of dividends on qualifying participations, i.e. investments with participation rates of at least 10%, will increase at federal level from 60% to 70% for private individuals. At cantonal level the taxation of such dividends remains unchanged at 50%.
More information on the new cantonal tax law and the current state of implementation can be found here: Change of tax law - sixth revision package