Applying for Tax Returns in Switzerland

The Swiss taxation system

Taxation system of Switzerland is based upon the application of federal, cantonal and local taxes. Agreements regarding the harmonization of certain taxation provisions have been made by the cantons, but differences still remain with respect to the wealth, estate, inheritances and gains from real estate property. Switzerland has double taxation agreements with about 60 countries that will significantly reduce certain taxes and even provide exemptions but Taxation is applied to all incomes and assets.

Tax returns for foreign citizens in Switzerland

For foreign citizens that are living in Switzerland, will not be levied withholding tax in following cases:

  • if they have a C residence permit
  • if they are cross-border employees
  • if they are married to Swiss citizens
  • if they are registered as sole traders in Switzerland
  • if they own real estate.

In all the above cases, one is required to file tax returns with the local Swiss authorities, in all of these situations. It is must for L or B permit holders to file their tax returns if they are earning over 120,000 CHF per year.

What must a tax return file contain?

It is necessary for the foreign citizens applying for tax returns in Switzerland to declare all of their sources of personal assets and income. The income includes salaries, dividends, pensions, interests and incomes made from real estate rentals, refers to all amounts of money made in Switzerland. The income tax rate in Switzerland is progressive at federal, cantonal and local levels and goes up to 41.5%.

The wealth tax is only applicable to Swiss-owned bank accounts, securities and real estate at cantonal and local levels on personal assets only. The maximum rate of wealth tax is 0.8%.  The information of tax return is also based on the number of children, residence and the marital status.

What is the relevant documentation when applying for tax returns in Switzerland?

When applying for tax returns in Switzerland foreign citizens are advised to collect and keep certain documents. These documents include salary flyers, bank and securities and other income sources statements.

The statements of occupational pension fund contribution or the private pension statements are also required for retired individuals.

When filling the tax returns for individuals who own a property in Switzerland, statements of property tax payments and bills for maintenance or renovations are very helpful.

For further details about the due dates for filling your tax returns or the taxation system, you can contact our law firm in Switzerland.