At a glance:
- The Swiss tax year runs from 01 January through to 31 December each year.
- B Permit holders earning less than CHF 120'000.- per year are taxed at source (deducted by your Employer) and do not have to file an income tax return.
- B Permit holders earning more than CHF 120'000.- per year, and those with either a C Permit, a spouse with a C Permit, or Swiss spouse, are required to file a tax return for income tax purposes.
- Tax return due dates can vary, though are generally around 31 March the following tax year (i.e. 31 March 2024 deadline for 2023's tax year).
- You are able to apply for tax return extensions with your cantonal tax office.
- Wealth tax greatly varies depending on your canton of residence
- VAT is 8.1% (2024).
- You can opt to pay church tax / religious tax if you register with a registered religious institution
You pay income tax on three levels: Federal, Cantonal, and Communal.
Federal tax is the same throughout Switzerland's 26 cantons, though the cantonal and communal tax rates can, and do, differ.
If you hold a B Permit, earn less than CHF 120'000.- per year, do not hold a C Permit, and do not have a Swiss spouse or spouse with a C Permit, your income tax will be entirely deducted at source.
Being taxed 'at source' means that your Employer will deduct tax before paying your salary, inclusive of all federal, cantonal, and communal taxes. Your gross income is used to determine the rate and amount of tax you pay, and you do not need to file a tax return for income tax.
If you hold a C Permit, earn more than CHF 120'000.- per year, have a Swiss spouse or spouse with a C Permit, you must file a tax return for income tax purposes each year.
Overseas income is considered when calculating your tax rate in Switzerland, but foreign income is not taxed in Switzerland. This may vary subject to double taxation agreements.
Wealth tax is not a federal tax, and is paid on a cantonal basis, independent of income.
It assesses your overall assets, and the tax rates vary depending on the canton in which you reside.
This tax can range from 0.10% to 1.10%, though these figures are subject to change.
You are liable for this tax if you are tax-resident in Switzerland, and will be taxed on your net assets.
However, there are exemptions and deductions available that could bring your total net assets below the respective cantonal limits, meaning no wealth tax would need to be paid.
Deductions include mortgages, credit card debts, loans, etc., all of which is deducted from your gross wealth.
You have to declare your global assets, which allows you to deduct your global debts. This can be particularly useful for mortgages on real estate in other countries.
Your Pillar 2 (workplace / occupational) pension and Pillar 3 accounts are not considered part of your assets for wealth tax purposes.
VAT in Switzerland, or TVA (FR), MWSt (DE), IVA (IT), is 8.1% (2024).
Goods for basic needs are subject to VAT at the reduced rate of 2.6% (2024).
Furthermore, services in connection with the provision of lodging are subject to VAT at the special rate of 3.8% (2024).
Church tax, also known as religious tax, is a tax levied in some Swiss cantons to support the activities and funding of religious institutions, primarily Christian denominations.
This tax is collected from members of religious communities that have an official agreement with the cantonal government.
This tax is typically applicable to members of officially recognised religious communities, such as the Roman Catholic Church, various Protestant denominations, and certain other religious organisations.
Individuals have the choice to become members of these religious communities and, by doing so, agree to pay the associated church tax.
Like many others, this taxis not necessarily applicable throughout Switzerland, and its presence and regulations can vary between cantons. You may find some cantons do not even have this tax at all.
Please note that all content within this response has been prepared for information purposes only. This response does not constitute financial, legal or tax advice. Always ensure you speak to a regulated Financial Adviser before making any financial decisions.