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Paying tax in Switzerland

There are two forms of taxation:

Tax at source

Your entire income is subject to tax at source at applicable rates. Tax is deducted directly from your salary. Your employer will do this automatically if you are a foreign worker and are resident in Switzerland for tax purposes but do not yet have a residence permit (permit C)  are not resident in Switzerland for tax purposes (cross-border commuter, weekly resident, conference speaker, sportsperson, artist etc.) but earn an income here.

If you are a foreign worker resident in Switzerland for tax purposes and your annual income is more than CHF 120,000, a statutory assessment of your whole income and assets will be carried out. Any taxes paid in excess will be deducted without interest and refunded.

The tax at source rate differs from canton to canton. You can get more information from the tax office in your canton or for a raugh idea via the tax calculator.

 

Filing an annual tax return

Filing an annual tax return will incur the following taxation:

 

Direct federal tax

Private persons who are either full Swiss citizens, have a C permit or earn more than CHF 120,000 per year have to pay direct federal tax on their income. This is raised by the cantons on behalf of the Confederation. For this, you file an annual tax return and pay your tax upon a definitive invoice sent to you.

 

Federal withholding tax

Withholding tax is raised on capital gains, e.g. on interest from investments and savings, dividends and profit shares. If you are resident in Switzerland, you can reclaim this tax from the local cantonal tax office. Usually the amount you can reclaim is set off against federal tax, provided you have declared your assets in your tax return.

 

Income tax

All cantons and communes apply a system of general income tax. The income tax is assessed according to total income. This total (gross income) does not correspond to the taxable income, which is calculated after various deductions have been made. This tax burden varies and is subject to the tax rate in the individual municipality.

 

Wealth tax

Wealth tax is paid on the value of all assets minus demonstrable debt and permitted social security contributions.

 

Church tax

In almost all cantons, the parishes of the three national churches (Protestant, Roman Catholic and Christian Catholic) collect a church tax from their members.