Even for the Swiss it is not an easy task to keep an eye on taxes and to have all relevant information at hand. This makes it even more difficult for foreigners who live and work in Switzerland and have to pay taxes as well. For this reason, we have summarized the answers to the most important questions about the taxation of foreigners in Switzerland:

How does the withholding tax work?

Foreigners with a residence permit B or L must pay a withholding tax in Switzerland. The employer is obliged to deducts the applicable tax costs directly from the salary and there are no additional expenses for a foreign employee. Foreign taxpayers with annual gross income below 120000 Swiss francs fall into this category.

 

Can I make additional deductions for withholding tax?

It is possible – irrespective of the amount of income and assets – to apply for a so-called withholding tax rebate and to reimburse a certain proportion of the withholding tax. This is possible if at least one of the following conditions applies:

  • if you contribute into the pillar 3a
  • if you contribute to the second pillar
  • if you have additional training and retraining costs
  • if you live apart during working week
  • if your effective travel costs to/from your place of work amount to more than 2100 Swiss francs annually
  • if you pay maintenance money or alimony
  • if you bear child care costs
  • if you can claim support deductions
  • if you have to bear illness or accident costs
  • if you make charitable donations worth more than 100 Swiss francs
  • if you are able to claim disability-related costs
  • if you have to settle debt interest

Important: The deadline for withholding tax correction is 31st of March. This deadline cannot be extended. If deductions are accepted, the calculated withholding tax is lowered accordingly. This results in a credit note settled by tax authorities.

Am I obliged to submit a standard tax return despite the withholding tax?

There are two cases in which, in addition to the withholding tax, a standard tax return has to be also submitted:

  • if your gross annual income is above 120000 Swiss francs, a standard tax return – a so-called retroactive assessment – has to be submitted. This also applies to married couples: as soon as one partner earns more than 120000 Swiss francs annually, the couple must complete a standard tax return.
  • anyone who receives income from securities, real estate, alimony, self-employment or lottery, has to submit a supplementary assessment regardless of the amount of the income.

Foreigners who work in Switzerland, but with residence in some other country, cannot submit a standard tax return.

We offer you our support

Steuerzentrum will assist you in exploring your tax deduction opportunities, helping you claim all possible refunds. Thanks to our advice and support, you can know exactly which tax deduction options are available, which deductions apply in your situation and which documents are to be submitted. This reduces your tax costs and saves you time.