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The Swiss tax system
The federal structure of Switzerland can be clearly seen when it comes to paying tax. Direct taxes are not only levied at federal level, but also by the cantons. Based on the tax laws of their canton, the communes also levy direct taxes.People who are domiciled or resident in Switzerland have an unlimited liability to pay tax. A person is resident in Switzerland for tax purposes if he or she:
- is resident for a minimum of 30 days in Switzerland and is in gainful employment, or
- is resident for a minimum of 90 days in Switzerland without being in gainful employment.
People who are domiciled abroad have a limited tax liability if they are required to pay tax as a result of economic ties to Switzerland (e.g. property, business premises etc.).
In addition, legal entities (limited companies, cooperatives, associations, foundations, etc.), which have their registered office or their de facto management in Switzerland have to pay tax here. There are two different groups of legal entities:
In addition, legal entities (limited companies, cooperatives, associations, foundations, etc.), which have their registered office or their de facto management in Switzerland have to pay tax here. There are two different groups of legal entities:
- Limited companies (joint stock corporation, limited partnerships, limited liability companies) and cooperatives;
- Other legal entities (associations and foundations, public corporations and institutes as well as investment funds with assets in the form of real estate)
Legal entities normally pay a corporate profits tax at federal level, and a corporate profits tax as well as a capital tax at cantonal and communal level.
When taxing families, the income of spouses who are legally married and living together as husband and wife is added together. The income of minor children is added to the income of the person who exercises parental care over them. An exception is the income that a child obtains from gainful employment, which is taxed separately.
The federal direct tax must be paid if a person’s taxable income is CHF 29'200 CHF or more in the case of a married couple, or CHF 16'900 CHF in the case of other people liable to pay tax.
- Income and wealth taxes: These include income tax, wealth tax, the poll, personal or household tax, inheritance and gift tax, and capital gains tax on real estate and real estate tax as a part of wealth tax.
- Taxes on legal transactions: these include stamp duty and conveyancing charges.
- Consumption taxes: these include value added tax, tax on tobacco, beer tax, mineral oil tax, automobile import tax, taxes on spirits and customs duties. These are indirect taxes.
- Taxes on possessions and expenditure: vehicle taxes, dog tax and the entertainment tax fall into this category.
Back to Overview Federal taxes
