Taxation in Switzerland
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Taxation |
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An aspect of fiscal policy |
Legal framework
Fiscal sovereignty
Switzerland is a
Since
Constitutional limits to taxation
The federal constitution imposes certain limits on taxation at the federal, cantonal and municipal levels. To begin with, it provides that no tax may be levied except where provided for by federal, cantonal or municipal statute.[8] Because statutes can at all levels be made subject to a popular referendum, Swiss tax rates are in practice set directly by the voters through instruments of direct democracy.[9]
The constitution mandates that taxation must be general and equal in nature, and it must be proportionate to one's ability to pay.
Direct taxes on natural persons
Income tax
Either a
Taxable income includes all funds accruing to a person from all sources, in principle without deduction of losses or expenses,[14] and including the rental value of a house lived in by its owner.[15] However, capital gains on private property (such as profits from the sale of shares) are tax-free, except where the cantons levy a tax on real estate capital gains.[16] Certain expenses are also deductible. These include social security or pension fund payments,[17] expenses related to the gain of income (such as employment expenses and maintenance costs of real estate) and alimonies.[18] Gifts and inheritances are also exempt from the income tax, but are subject to separate cantonal taxes.[14]
Non-working foreigners resident in Switzerland may choose to pay a lump-sum tax instead of the normal income tax. The tax, which is generally much lower than the normal income tax, is nominally levied on the taxpayer's living expenses, but in practice (which varies from canton to canton), it is common to use five times or seven times the rent paid by the taxpayer as a basis for the lump-sum taxation.[19][20]
In 2011, the federal income tax varied from a bracket of 1% (for single tax payers) and 0.77% (for married taxpayers) to the maximum rate of 11.5%. Individuals earning below 13,600 and couples earning below 27,000 Swiss francs were exempt. On cantonal level, tax rates varies heavily, Obwalden adapted a 1.8% flat tax on all personal income following a cantonal referendum in 2007. In most cantons, the rate is proportional with a maximum rate of 6.5% in Bern, whereas in Zurich it was 13% and in Geneva 17.58-.76% (depending upon taxes as single or jointly).[21][22]
Wealth tax
A proportional wealth tax of around 0.3 to 0.5 percent[23] is levied by the cantons on the net worth of natural persons. The tax is levied on the value of all assets (such as real estate, shares or funds) after the deduction of any debts.[24]
Taxes by canton
Income of a single person | Income of a married couple with 2 children | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Cantons | 20,000 | 40,000 | 60,000 | 80,000 | 100,000 | 200,000 | 500,000 | 20,000 | 40,000 | 60,000 | 80,000 | 100,000 | 200,000 | 500,000 | |
Zurich
|
477 | 2,149 | 4,577 | 7,629 | 11,018 | 31,411 | 108,877 | 48 | 85 | 1,092 | 2,791 | 4,882 | 20,624 | 90,318 | |
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511 | 3,847 | 7,567 | 11,369 | 15,483 | 39,496 | 120,369 | 0 | 0 | 1,756 | 5,336 | 8,517 | 28,806 | 106,809 | |
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278 | 3,025 | 6,170 | 9,370 | 12,552 | 29,586 | 87,002 | 50 | 50 | 1,319 | 3,634 | 6,331 | 22,204 | 79,707 | |
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266 | 2,944 | 5,367 | 8,001 | 10,589 | 23,817 | 64,149 | 100 | 100 | 1,545 | 4,193 | 6,752 | 19,303 | 59,634 | |
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545 | 1,952 | 3,862 | 6,120 | 8,583 | 21,211 | 57,276 | 0 | 54 | 1,125 | 2,619 | 4,024 | 15,761 | 53,702 | |
Obwald
|
340 | 2,596 | 5,042 | 7,502 | 9,907 | 22,029 | 58,451 | 0 | 0 | 1,604 | 4,199 | 6,523 | 18,578 | 54,999 | |
Nidwald
|
361 | 2,530 | 5,137 | 7,905 | 10,709 | 25,455 | 65,696 | 50 | 50 | 812 | 2,756 | 5,196 | 19,159 | 62,707 | |
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581 | 2,837 | 5,572 | 8,874 | 12,164 | 30,297 | 94,726 | 0 | 357 | 2,361 | 4,390 | 6,793 | 23,237 | 81,708 | |
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148 | 1,049 | 2,197 | 3,586 | 5,729 | 19,488 | 51,434 | 0 | 0 | 0 | 359 | 1,059 | 6,943 | 45,645 | |
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601 | 3,372 | 6,893 | 10,986 | 15,443 | 40,909 | 111,188 | 0 | 124 | 1,406 | 3,633 | 6,242 | 27,191 | 105,740 | |
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803 | 3,707 | 7,479 | 11,546 | 15,770 | 39,274 | 108,967 | 80 | 375 | 2,921 | 5,364 | 8,672 | 29,143 | 101,170 | |
Basle-City
|
0 | 2,770 | 7,034 | 11,322 | 15,586 | 37,075 | 110,510 | 0 | 0 | 0 | 2,987 | 7,251 | 28,739 | 93,319 | |
Basle-Country
|
0 | 2,617 | 6,498 | 10,917 | 15,667 | 41,732 | 124,296 | 0 | 0 | 0 | 2,534 | 6,180 | 28,722 | 107,828 | |
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569 | 2,970 | 6,180 | 9,961 | 14,150 | 36,512 | 97,717 | 60 | 90 | 1,863 | 4,280 | 6,645 | 25,079 | 93,525 | |
Appenzell Outer-Rhodes
|
697 | 3,161 | 6,249 | 9,809 | 13,503 | 33,396 | 89,536 | 0 | 409 | 2,739 | 5,075 | 7,664 | 26,582 | 86,494 | |
Appenzell Inner-Rhodes
|
629 | 2,601 | 4,993 | 7,525 | 10,308 | 24,883 | 64,824 | 0 | 480 | 1,670 | 3,155 | 5,392 | 19,336 | 62,455 | |
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376 | 3,141 | 7,102 | 11,475 | 16,116 | 39,961 | 106,857 | 0 | 0 | 1,015 | 3,622 | 6,531 | 28,108 | 99,717 | |
Grisons
|
22 | 2,251 | 5,403 | 8,962 | 12,585 | 32,274 | 93,439 | 0 | 0 | 390 | 2,691 | 5,204 | 22,378 | 82,271 | |
Argovia
|
0 | 2,375 | 5,722 | 9,283 | 13,004 | 32,960 | 98,249 | 0 | 122 | 1,283 | 3,237 | 5,839 | 23,388 | 85,035 | |
Thurgovia
|
179 | 2,807 | 6,043 | 9,344 | 12,704 | 31,388 | 91,205 | 0 | 0 | 683 | 3,109 | 5,747 | 22,647 | 80,293 | |
Tessin
|
307 | 1,998 | 5,295 | 9,065 | 13,138 | 35,748 | 110,578 | 40 | 40 | 721 | 1,841 | 4,189 | 24,016 | 99,484 | |
Vaud
|
0 | 2,020 | 7,713 | 11,754 | 16,027 | 41,897 | 131,490 | 0 | 0 | 630 | 3,930 | 9,068 | 27,754 | 110,347 | |
Valais
|
34 | 2,757 | 5,718 | 9,572 | 13,876 | 40,477 | 111,349 | 34 | 34 | 477 | 2,362 | 4,104 | 22,601 | 94,233 | |
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474 | 3,631 | 7,944 | 12,388 | 17,002 | 43,531 | 116,508 | 0 | 350 | 2,447 | 6,270 | 9,516 | 32,577 | 111,752 | |
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25 | 1,969 | 5,788 | 10,398 | 15,103 | 39,708 | 123,070 | 25 | 25 | 25 | 348 | 3,093 | 24,145 | 98,891 | |
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479 | 3,380 | 7,175 | 11,817 | 16,441 | 42,682 | 125,006 | 0 | 0 | 1,616 | 4,710 | 8,593 | 30,506 | 110,001 | |
Federal taxes only | 0 | 133 | 432 | 936 | 1,838 | 9,976 | 45,268 | 0 | 0 | 0 | 0 | 87 | 6,002 | 40,842 |
Corporate taxation
![](http://upload.wikimedia.org/wikipedia/commons/thumb/a/a6/Credit_Suisse_Z%C3%BCrich.jpg/220px-Credit_Suisse_Z%C3%BCrich.jpg)
Switzerland has a "classical" corporate tax system in which a corporation and its owners or shareholders are taxed individually, causing economic double taxation. All legal persons are subject to the taxation of their profit and capital, with the exception of charitable organisations.[26] Tax liability arises if either the legal seat or the effective management of a corporation is in Switzerland.[27] To the extent non-resident companies have Swiss sources of income, such as business establishments or real estate, they are also liable for taxation.[27] Conversely, as a unilateral measure to limit double taxation, profits from foreign business establishments or real estate are exempted from taxation.[27]
Profit tax
A proportional or progressive tax is levied by the Confederation (at a flat rate of 8.5%) and the cantons (at varying rates) on corporate profits. The tax is based on the
A number of provisions limit the double taxation of profits at the corporate level and contribute to Switzerland's tax haven status. To begin with, a "participation exemption" is granted to companies who hold 20 percent or more of the shares of other companies; the amount of tax due on the corresponding profit is reduced in proportion to the percentage of shares held.
Capital tax
A proportional tax is levied by the cantons (at varying rates) on the Eigenkapital (
Furthermore, many Cantons levy minimum taxes on capital or a general minimum tax, which means that small companies and non-profitable companies have to pay more taxes percentagewise than larger companies. Cantonal legislators try this way to cover the costs associated with auditing these small companies.[33]
Global minimum corporate tax rate
Starting in 2023, about 200 companies with headquarters in the country and a several thousand subsidiaries of foreign companies would pay the global minimum corporate tax rate. The new rule applies to companies with at least €750 million in annual turnover, which is said to represent only about 1% of the companies based in Switzerland. These rules do not do away with some special regimes in Switzerland that benefit holding companies including tax relief on divideds and capital gains.[34]
Other federal taxes
Value added tax
The
- Foodstuffs (except alcoholic beverages)
- Cattle, poultry, fish
- Seeds, living plants, cut flowers
- Grains
- Animal feed and fertilizer
- Medications
- Newspapers, magazines, books and other printed products without advertising character of the kinds to be stipulated by the Federal Council
- Services of radio and television companies (exception: the normal rate applies for services of a commercial nature)
A special rate of 3.8% is in use in the hotel industry.[35] Yet other exchanges, including those of medical, educational and cultural services, are tax-exempt; as are goods delivered and services provided abroad.[36] The party providing the service or delivering the goods is liable for the payment of the VAT, but the tax is usually passed on to the customer as part of the price.[37]
In 2014 total revenue from VAT was nearly CHF 11 billion (short scale) on CHF 866 billion of taxable sales. In 2013 the revenue and sales were CHF 10.3 billion and 858 billion respectively.[38]
Federal withholding tax
The federal withholding tax (Verrechnungssteuer / impôt anticipé / Imposta preventiva) is levied on certain forms of income, most notably dividend payments, interest on bank loans and bonds, liquidation proceeds, lottery winnings and payments by life insurances and private pension funds.[39] The debtor of such payments is liable for the payment of the tax; they must pay the creditor only the net amount.[40] The tax rate is 35% for moveable capital revenue and for lottery winnings of 1 million francs or more, 15% for life annuities and pensions and 8% for other insurance benefits.[41]
With respect to creditors resident in Switzerland, the withholding tax is only a means of securing the payment of the income or profit tax, from which the creditor may then deduct the amount already withheld, or request its refund.[42] The same applies to foreign creditors to the extent that a tax treaty provides for it.[43] Other foreign creditors are not eligible for a refund; with respect to them, the withholding tax is a genuine tax.
Stamp duties
Stamp duties are a group of federal taxes levied on certain commercial transactions. The name is an anachronism and dates back to the time when such taxes were administered with physical
The transfer tax (Umsatzsteuer / Imposta sulla cifra d'affari) is levied on the trade in certain securities by certain qualified traders (Effektenhändler; mostly
Custom duties
The Confederation can levy
Casino tax
After the removal of the casino ban from the Constitution in 1993, the Confederation received the power to collect a special tax on the revenue of casinos. The tax may not exceed 80% of the gross gaming revenue and is assigned to the AHV/IV fund.[41]
Tax scales
Grand casinos holding a type A concession: unlimited bets, unrestricted number of table games and slot machines. Currently, 8 Grand casinos are in operation. The basic tax rate is 40 percent for the first CHF 10 million of gross gaming revenue. For each additional million, the tax rate is increased by 0.5 percent until it reaches the maximum rate of 80 percent.[41]
Casinos holding a type B concession: limited bets, limited selection of table games and limited number of slot machines. Currently, 13 casinos are in operation. The basic tax rate is 40 percent for the first CHF 10 million of gross gaming revenue. For each additional million, the tax rate is increased by 0.5 percent until it reaches the maximum rate of 80 percent.[41]
Special consumption taxes
The Confederation levies special consumption taxes on the importation or manufacture of
Military service exemption tax
Every Swiss man is required to perform military service (Art. 59 para. 1 Cst). Anyone who, for whatever reason, fails (in whole or in part) to fulfil this duty personally by doing military or civilian service has to pay military service exemption tax.
The exemption tax amounts to CHF 3 per CHF 100 of income liable to tax, but no less than CHF 400. However, it is reduced according to the total number of service days performed by the end of the relevant year. The reduction is one tenth for 50 to 99 military service days (75 to 149 civilian service days), plus another tenth for each set of 50 additional military service days (75 civilian service days) or fractions thereof.
The exemption tax assessment is carried out annually, generally in the year following the relevant year. Only those who have performed the total number of mandatory service days are entitled to a refund of the exemption tax(es) paid. The revenue from military service exemption tax amounted to approximately CHF 174 million in 2016.[41]
Other cantonal taxes
In addition to the taxes mentioned above, the cantons are free to introduce others. Several cantons levy an
Casino tax
All cantons with casinos holding a type B concession amended their tax legislation and introduced a tax on gross gaming revenue of casinos. The tax may not amount to more than 40 percent of the total casino tax due to the Confederation.
Tax rates and statistics
![]() | This section needs to be updated.(June 2018) |
In 2016, some
Tax evasion
Depending on the nature of the tax at issue, criminal offences related to the nonpayment of taxes are regulated in substantially different ways by cantonal and federal statutes.
Tax evasion in Switzerland was estimated at CHF 66 billion according to a study in 2023. The
See also
Notes and references
- ^ Locher, 49.
- ^ Locher, 50.
- ^ Locher, 89 et seq.
- ^ Linder, 263.
- ^ a b Locher, 47 et seq.
- ^ "Bundesverfassung der Schweizerischen Eidgenossenschaft". Fedlex. 2022-02-13. Retrieved 2023-08-20.
- ^ Locher, 46.
- ^ a b c d Amonn, 26.
- ^ Linder, 161 and 263.
- ^ Amonn, 61.
- ^ Amonn, 33.
- ^ Amonn, 34.
- ^ a b Amonn, 65.
- ^ a b Amonn, 35.
- ^ Amonn, 52.
- ^ Amonn, 40.
- ^ Amonn, 46.
- ^ Amonn, 58.
- ^ Amonn, 59.
- ^ "Lump-sum Taxation: An interesting alternative" (PDF). KPMG. 2023. Retrieved 2023-08-18.
- ^ "Switzerland capital gains tax rates, and property income tax". Globalpropertyguide.com. Retrieved 2016-07-29.
- ^ "Obwalden votes for flat rate tax - SWI". Swissinfo.ch. 2007-12-16. Retrieved 2016-07-29.
- ^ Mäusli-Allenspach, 149.
- ^ Mäusli-Allenspach, 145.
- ^ "Belastung des Bruttoarbeitseinkommens durch Kantons-, Gemeinde- und Kirchensteuern nach Steuersubjekt und Kantonshauptorte". Swiss Federal Statistical Office. 4 March 2016.
- ^ Amonn, 69.
- ^ a b c d Amonn, 70.
- ^ Amonn, 71.
- ^ a b Amonn, 76.
- ^ a b Amonn, 79.
- ^ Amonn, 80.
- ^ Amonn, 81.
- ^ "Vergleich Mindeststeuersätze Kapitalsteuer für Unternehmen in allen 26 Kantonen". Nexova. 3 February 2023.
- ^ "Switzerland's tax haven reputation runs deep even with reforms". 17 April 2023.
- ^ Amonn, 179.
- ^ Amonn, 172.
- ^ Amonn, 169.
- Swiss Federal Statistical Office. 12 June 2016. Archived from the originalon 2016-12-29.
- ^ Amonn, 86.
- ^ Amonn, 89.
- ^ a b c d e f g "The Swiss Tax System" (PDF). www.eda.admin.ch.
- ^ Amonn, 91.
- ^ Amonn, 92.
- ^ Mäusli-Allenspach, 325.
- ^ Amonn, 93 et seq.
- ^ Amonn, 96.
- ^ Amonn, 94.
- ^ Amonn, 98 et seq.
- ^ Mäusli-Allenspach, 360 et seq.
- ^ Locher, 205.
- ^ Locher, 188.
- ^ Locher, 204.
- ^ Locher, 223.
- ^ Locher, 225.
- ^ a b Statistik, Bundesamt für. "Steuern und Einnahmen" (in German). Retrieved 2018-09-01.
- ^ "Switzerland - Taxes and Accounting". Country Profiles. Federation of International Trade Associations. Archived from the original on 2008-10-18. Retrieved 2008-08-16.
- ^ Locher, 357.
- ^ Locher, 363.
- ^ Locher, 373; see Art. 175 of the Federal Direct Tax Statute.
- ^ Locher, 372; see Art. 186 of the Federal Direct Tax Statute.
- ^ Locher, 364.
- ^ Müller, Armin (2023-06-21). "Étude sur l'amnistie l fiscale – Près de 66 milliards de francs ont été cachés au fisc suisse". Tribune de Genève (in French). Retrieved 2023-06-29.
Bibliography
- Amonn, Toni (2008). Repetitorium zum Steuerrecht (in German) (3rd. ed.). Berne: Haupt. ISBN 978-3-258-07124-4.
- Locher, Peter; Blumenstein, Ernst (2002). System des schweizerischen Steuerrechts (in German) (6th. ed.). Zürich: Schulthess. ISBN 3-7255-4342-9.
- Mäusli-Allenspach, Peter; Oertli, Mathias (2006). Das schweizerische Steuerrecht: Ein Grundriss mit Beispielen (in German) (4th. ed.). Berne: Cosmos. ISBN 3-85621-171-3.
- Linder, Wolf (2005). Schweizerische Demokratie: Institutionen, Prozesse, Perspektiven (in German) (2nd. ed.). Berne: Haupt. ISBN 978-3-258-06842-8.