Switzerland - Tax Guide for Freelance Contractors
Welcome to our guide to Swiss taxation. You will find a wealth of information which will be useful if you plan to work in, or place consultants in Switzerland.
Our tax guides give a general overview of the actual taxation rates and rules at the time of writing. There are of course many ways to legally reduce tax or social security burdens in Switzerland. Please contact us for more information or an actual breakdown of your situation, and to find out more about our range of payroll and contact management services in Switzerland.
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Tax Residents in Switzerland: are liable to pay Swiss tax on their worldwide income,
Non-residents in Switzerland: are liable to pay tay only on their Swiss-sourced income.
In Switzerland, an individual considered as a normal taxpayer is liable for the following taxes:
- Federal tax (flat rate),
- Cantonal tax (varies from canton to canton),
- Communal tax (varies from commune to commune),
- Wealth tax (variable),
- Church tax (not mandatory, only exists in certain cantons).
Taxation at source
In principle, any foreign individual working in Switzerland is taxed at source.
The deductions are made and paid by the employer on a monthly basis to the tax authorities.Tax is due at both federal and cantonal levels. In certain cantons there may also be an optional church tax.
Normal taxpayers
Swiss Nationals take care of their taxes personally and file a tax return usually between the month of February and May each year depending on the canton.
The annual tax payment is split into 10 instalments (in favour of the canton and the commune) and one nstalment (in favour of the Federal Confederation).
Individuals will qualify as resident
- If they are working in Switzerland,
- If, their main home or centre of economic interests is in Switzerland on a permanent or temporary basis
Married persons are taxed jointly.
Taxable income includes:
- employment income,
- investment income,
- social security payments,
- income from property, dividends, etc.,
- moving costs are not deductible and are taxable if reimbursed by your employer,
- benefits in kind,
- wealth.
For foreign employees taxed at source, the tax rate applicable is more favourable due to the fact that it takes into account the various standard deductions.
For Normal taxpayers, certain deductions are permissible including:
- travel expenses to the workplace,
- health premiums up to CHF 2’400 per year for a single person,
- child allowances (1st child CHF 5’500, 2nd child CHF 6’000 and 3rd child CHF 6’500) under 18 years of age or pursuing studies,
- food expenses if unable to eat at home, maximum allowed per year is CHF 4’800
- non- reimbursed medical costs can also be deducted (under certain conditions),
- other expenses to a maximum of CHF 4’000 per year.
Some of the above amounts may vary from one canton to another.
Income tax rates for 2010: vary from one canton to another, below some rates on a few cantons :
- 16.55% in Geneva for a salary of CHF 100’000,
- 10.08% in Zürich for a salary of CHF 100’000,
- 16.88% in Basel for a salary of CHF 100’000.
Tax Returns
A tax return must be completed annually between February and May of the following year.