Taxes in Switzerland for expats: everything you need to know

Welcome to Switzerland – a country known for its mountains, banks, and… taxes.

If you’re an expat living and working here, you’ll soon discover that the Swiss tax system is anything but simple. It combines clarity with complexity, fairness with federalism. Understanding the system helps you avoid mistakes and make informed financial decisions.

This guide brings clarity to the tax jungle.

What makes the Swiss tax system unique

What sets Switzerland apart is that there is no single central tax law that applies equally to everyone. Instead, taxes are levied on three levels – federal, cantonal, and municipal. Each of the 26 cantons has its own tax laws, rates, and allowances.

The direct federal income tax is relatively moderate, with a maximum rate of 11.5% applied progressively. However, cantonal and municipal taxes have a far greater impact, varying significantly depending on your place of residence. For example, someone living in Geneva pays considerably more on average than someone with the same income living in Zug or Schwyz. In 2024, the average tax burden for a middle income in Geneva was around 43%, while in Schwyz it was only about 23%. So for international workers, where you choose to live can have a major financial impact – something worth considering carefully.

Another distinctive feature of the Swiss tax system is the wealth tax, which is levied on the net assets of individuals. Unlike in many other countries where wealth is barely or not taxed at all, this is standard in Switzerland. Depending on the canton, the tax ranges from 0.1% to 1.0% annually. This mostly affects people with significant financial or real estate assets, such as bank deposits, securities, or property abroad.

Capital gains from private asset management – for example, from selling shares – are generally tax-free, provided the individual is not classified as a professional investor. However, ongoing investment income such as interest and dividends is treated as taxable income.

This clear distinction is especially relevant for foreign investors who relocate to Switzerland and are seeking a tax-efficient environment for their investments.

Looking for expert investment advice? Schedule your free session with a wealth advisor today.

Do expats have to pay income tax in Switzerland?

Yes – foreign nationals are generally subject to tax in Switzerland if they either have a tax residence or stay in the country for a certain minimum period.

Specifically, this means:

Over 30 days in Switzerland with gainful employment, or
Over 90 days without gainful employment.

From this point, all worldwide income and assets must be declared in Switzerland. This includes:

Rental income from abroad,
Business interests,
Foreign real estate, or
Investment income.

A wide network of double taxation agreements (DTAs) ensures that foreign income is not taxed twice. In practice, this means certain types of income that are taxed abroad are tax-exempt in Switzerland – though they are still used to calculate the applicable tax rate (known as the "progression proviso").

For incoming professionals, this rule can have a noticeable impact. Even though foreign dividends may not be taxed directly, they can increase the tax rate applied to other income earned in Switzerland.

Withholding tax: when it applies and how it works

Most international employees who are new to Switzerland and do not hold a C permit are subject to Swiss withholding tax. This means that income tax is deducted directly from the salary by the employer and paid to the tax authorities.

The amount of withholding tax is based on cantonal rates, which take into account:

Marital status,
Number of dependent children,
Religious affiliation (in cantons that levy church tax).

As a result, a single person without children may have significantly higher deductions than a married person with two children, even if they earn the same salary.

If annual income exceeds 120'000 CHF, individuals taxed at source are also required to complete a standard tax return. The withholding tax already paid is credited, but the final amount is then recalculated based on actual income, assets, and allowable deductions.

Even below this income threshold, it is possible to request an adjustment to the withholding tax – for example, in the case of extraordinary expenses or high work-related costs that exceed the flat-rate allowance.

How is income tax calculated in Switzerland?

Income tax is calculated progressively at both the federal and cantonal levels. In other words, the more you earn, the higher the tax rate. However, the progression scale varies from canton to canton.

The calculation is based on taxable income – that is, gross income minus all allowable deductions. These include:

Work-related expenses such as commuting, meal allowances and training costs,
Insurance premiums (e.g. health and life insurance),
Interest on private loans (up to a certain cap),
Alimony payments,
Contributions to tied pension plans (pillar 3a),
Child and dependent deductions.

Donations to charitable organisations can also be deducted, provided they exceed a minimum threshold and are made to approved institutions.

For new residents who start earning taxable income in their first or second year in Switzerland, contributing to a pillar 3a pension plan can be particularly beneficial. Depending on the amount contributed and income level, the tax savings can reach several thousand francs per year.

Tax return: deadlines, obligations and frequently asked questions

Not all foreign nationals in Switzerland are required to file a tax return. As mentioned earlier, the obligation to undergo the standard assessment process depends on residency status and income level.

You must file a tax return in the following cases:

Your annual income exceeds CHF 120,000 (even if you are taxed at source),
You hold a permanent residence permit (Permit C),
You are married to a Swiss citizen or someone with a C permit,
You own property or are self-employed.

The tax period corresponds to the calendar year (from 1 January to 31 December). In most cantons, the deadline for submitting the 2025 tax return is 31 March 2026. Extensions are often available upon request — in many cases free of charge until the end of June, and in some cases even later for a fee.

All relevant documents must be enclosed with the return or kept ready if requested. These include:

Your salary certificate from your employer,
Bank statements (interest and balances as at 31 December),
Proof of payments into the 3rd pillar (pillar 3a),
Rental agreements and receipts for professional expenses,
Documentation of foreign income or assets.

Filing a complete and accurate tax return is essential. Swiss tax authorities are increasingly working with international data sources to cross-check global asset information. Incorrect or missing information can result in fines or additional taxes.

Leaving Switzerland: what you need to know from a tax perspective

Your tax liability in Switzerland generally ends on the day you officially deregister. However, there are some important formalities to observe.

You must submit a deregistration notice to your local municipality. At the same time, you’ll need to complete an exit tax return, which reports your income up to the date of departure as well as your current assets.

Particular attention is required when withdrawing pension assets (from a pension fund or vested benefits account). If you access these funds before the official retirement age, they are subject to withholding tax in Switzerland — typically at a reduced pension rate, but still a significant amount.

In many cases, it is more advantageous to transfer your pension assets to a vested benefits account and withdraw them at a later stage — especially if your new country of residence does not have a double taxation agreement with Switzerland.

Conclusion: Swiss taxes – plan wisely, act strategically

Switzerland’s tax system may seem complex at first, but it offers real opportunities for tax optimisation. Stay informed: tax laws can change, and each canton has its own specifics. With the right knowledge, you can avoid unpleasant surprises and make confident financial decisions.