Tax

Federal, cantonal, municipal

Taxes are collected on three levels. The Confederation levies taxes on income, as do the cantons and municipalities; the latter also charge a wealth tax. The tax burden in the Canton of Zurich is relatively moderate by international standards. A typical feature of Switzerland’s federal structure is that each municipality and each canton can determine its own rate of taxation for the municipal and the cantonal tax; the federal tax is the same throughout Switzerland.

The Cantonal Tax Office supplies comprehensive information about the tax system in the Canton of Zurich, and the “Tax calculator” web application helps you to obtain a provisional tax assessment.

Self-employed persons

Self-employed persons declare their income by way of a tax declaration.

Taxation at source

Foreign employees who do not yet have a “C” residence permit are subject to taxation at source. This means the employer deducts the municipal, cantonal and federal taxes directly from the salary. If the gross income exceeds CHF 120 000 per year, a tax return has to be completed and taxes are assessed retrospectively.

Expatriates

Expatriates may also benefit from special guidelines according to which they can deduct particular professional expenses.

Value added tax

The normal rate is eight (8) per cent.

Double taxation agreements

Switzerland has concluded agreements to avoid double taxation with over 100 other states – including all the EU and EFTA countries. These agreements prevent double taxation of income, assets and inheritances and to some extent also include provisions for reductions of withholding tax.

Withholding tax

A thirty-five (35) per cent withholding tax is charged on deposit interest paid by Swiss banks and on earnings from Swiss securities; banks deduct the tax directly from the interest credited. Withholding tax is refunded on application if the taxed securities are declared on the tax return.