FAQ on private taxes

More than half of the cantons in Switzerland levy a tax on real estate. This periodic property tax, is assessed and collected annually. Typically, based on the tax value that applies at the end of the tax period and is primarily a municipal tax. In cases where it is a cantonal tax, municipalities usually benefit significantly from its revenue.

A municipal tax on properties located within the canton, whether owned by natural persons or legal entities, is levied in all municipalities of the cantons.

In Switzerland, several cantons have an optional cantonal and municipal tax, which means that these taxes may be imposed depending on specific conditions or classifications of the properties. These cantons include:

1. Vaud (VD): Vaud imposes a cantonal and municipal optional additional tax on properties that serve as capital investments for legal entities. Properties used by legal entities for their own economic or industrial purposes are exempt from this tax.
2. Neuchâtel (NE): Neuchâtel levies a cantonal tax on properties that serve as capital investments for both legal and natural persons, as well as on properties owned by pension funds. Certain municipalities within Neuchâtel may also impose an “extraordinary” municipal tax on properties.

In Switzerland, the property tax is levied exclusively by the canton itself (without a municipal tax) in the following cantons:

• Geneva (GE)
• Thurgau (TG)

In these cantons, the property tax is administered and collected solely by the cantonal authorities, and there is no additional municipal tax imposed on properties located within their jurisdictions.

Yes, all property values ​​must be declared, including those in other cantons or abroad. The income derived from them must also be declared in the tax return.

Although properties are taxed at the location of the property, the value of the property abroad must be declared in your tax return because it is considered for the calculation of the tax rate and for international tax allocation (allocation of debts, interest expenses, and social deductions).

The value of the property and the income derived from it are thus only considered for determining the tax rate in Switzerland. This means that the taxable income and taxable assets in Switzerland do not fundamentally change. Any existing debts and interest expenses are proportionally allocated to Italy in the international tax allocation process, which may still increase the taxable income and assets.

The cantons in Switzerland that levy a municipal tax on properties located within the canton, regardless of whether they are owned by natural or legal persons, include:

• Gallen (SG)
• Ticino (TI)
• Valais (VS)
• Jura (JU)

In these cantons, municipalities impose a municipal tax on all properties within their jurisdiction, irrespective of the owner being a natural person or a legal entity. This municipal tax is a standard levy applied to properties as part of the local taxation system.

The cantons in Switzerland that do not levy a municipal tax on properties located within the canton, regardless of whether they are owned by natural or legal persons, are:

• Zurich (ZH)
• Schwyz (SZ)
• Glarus (GL)
• Zug (ZG)
• Solothurn (SO)
• Basel-Country (BL)
• Aargau (AG)

In these cantons, municipalities do not impose a specific municipal tax on properties. Instead, they rely on other forms of revenue or have different tax structures in place.

In Switzerland, a cantonal tax is levied on properties owned by legal entities in addition to the municipal tax on all properties in the following cantons:

• Ticino (TI)
• Valais (VS)

In these cantons, legal entities owning properties are subject to both a municipal tax imposed by the respective municipalities and a separate cantonal tax imposed by the canton itself. This dual taxation structure applies specifically to properties owned by legal entities, distinguishing them from taxes levied on properties owned by natural persons.

At the end of the year, you must report your securities holdings as part of your wealth in your tax declaration. Here is how you can do it:

• You must include the value of your securities as of December 31st in your annual tax declaration.
• Most brokers provide annual statements that summarize your holdings and transactions. These statements can be used to fill out the relevant sections of your tax declaration.
• You need to provide details such as the number of shares, the name of the company, and the value of the securities.

Yes, if you sold stocks during the year, you are generally required to declare these transactions in your tax return. This includes reporting the details of the stocks you sold, such as the number of shares, the sale price, and any capital gains or losses realized from the transactions. It’s important to accurately report these details to ensure compliance with tax regulations in your jurisdiction. For tax purposes, only securities that were disposed of in a previous tax year are irrelevant.

Step-by-step guide to reporting securities holdings:

1. Gather Necessary Documents:
   • the annual statement from your broker;
   • any statements showing dividends received during the year;
   • If you have interest-bearing securities, gather statements showing the interest earned.
2. Fill Out the Tax Declaration Form:
   • Wertschriften- und Guthabenverzeichnis (Wealth Inventory): This section of your tax declaration is where you list your securities holdings. Include the name of each security, the number of shares, and the value as of December 31st.
   • Erträge aus Wertschriften (Income from Securities): Report any income from dividends or interest in this section.
3. Detailing Securities Holdings:
   • Description of Securities: Provide a detailed description of each security (e.g., company name, type of security, ISIN number).
   • Quantity: State the number of shares or units you hold.
   • Market Value: Indicate the market value of each security as of December 31st. This value is typically provided in your broker’s annual statement.
   • Acquisition Date: Include the date when you acquired each security, if available.
4. Report Dividends and Interest Income:
   • Dividends: Include the total dividends received during the year. These are generally subject to a 35% withholding tax in Switzerland, which can be reclaimed or credited in your tax return.
   • Interest: Report any interest income from bonds or other interest-bearing securities.
5. Foreign Securities:
   • Double Taxation Agreements: If you hold foreign securities, check if there are double taxation agreements (DTAs) between Switzerland and the country where the securities are issued. This can affect how foreign income is taxed.
   • Foreign Withholding Taxes: Report any foreign withholding taxes paid on dividends or interest. You may be able to reclaim these taxes or get a credit against your Swiss tax liability.
6. Submit Supporting Documents:
   • Broker Statements: Attach copies of your broker’s annual statement and any other relevant documents.
   • Dividend and Interest Statements: Include copies of statements showing dividends and interest received.

Form DA-1 in Switzerland is primarily used for claiming relief or refund of withholding tax on dividends from various foreign countries. It applies to dividends from foreign countries where Switzerland has tax treaties or agreements in place to avoid double taxation.

The purpose of Form DA-1 remains to allow Swiss taxpayers to declare foreign income, specifically dividends, and apply for relief from withholding taxes imposed by foreign jurisdictions. This process ensures that taxpayers are not subjected to double taxation on the same income both in Switzerland and abroad, aligning with international tax principles and agreements Switzerland has with various countries.

Under double taxation agreements, usually 15 percent of withholding tax can be credited against Swiss income tax. Reclaiming withholding tax involves some effort, so it’s worthwhile only for larger dividend amounts. The Swiss Federal Tax Administration provides a corresponding form for this purpose.

Dividends are treated differently from capital gains. Here is how they are handled:

• Dividends are considered taxable income and must be reported in your tax declaration.
• Dividends are usually subject to a withholding tax of 35%, which is deducted at the source. This tax can be reclaimed or credited against your tax liability when you file your tax return.
• If you receive dividends from foreign companies, the taxation might be subject to double taxation agreements between Switzerland and the respective country.

A tax residence in Switzerland is established if a person stays in Switzerland:

• For at least 30 days while engaging in gainful employment, or
• For at least 90 days without engaging in gainful employment.

Individuals residing abroad are subject to limited tax liability if there is an economic relationship between the individual and certain taxable objects located in Switzerland, such as business operations, permanent establishments, or real estate.

Income tax encompasses all types of income, such as:

• Income from dependent and self-employment
• Returns on movable and immovable property
• Pension income
• Other income like replacement income and alimony

General deductions include private debt interest, alimony, premiums, and contributions to social security (AHV/IV/EO/ALV), occupational and tied pension plans, life, health, and accident insurance, interest on savings, costs of professional training and continuing education, double-earner deduction, and deduction for childcare by third parties.

Taxable income is the net income reduced by social deductions such as personal deductions, child deductions, deductions for married couples, and deductions for dependents.

Income tax rates are progressively structured into three tariffs: a basic tariff for single persons, a tariff for married persons, and a parent tariff.

The maximum statutory income tax rate is 11.5%, reached at a taxable income of CHF 912,600 for married and single-parent families or CHF 769,700 for other taxpayers.

Married couples form a single economic entity for tax purposes. Their incomes are combined, and they are jointly liable for taxes and exercise their procedural rights and obligations jointly. The same rules apply to registered partnerships.

Joint taxation ends upon the death of a spouse, divorce, or legal/actual separation.

The married tariff accounts for the limited economic capacity of a multi-person household compared to a single-person household. The parent tariff, which includes a deduction per child or dependent, is for taxpayers living with and primarily responsible for maintaining children or dependents.

The income of minors is attributed to the holder of parental authority, except for earned income, which is taxed independently by the child.

To counteract cold progression, tariffs and deductions for individuals are annually adjusted to the national consumer price index. Adjustments are excluded in case of negative inflation.

Cold progression occurs when a taxpayer is subjected to a higher average tax rate due to an increase in nominal income, without a corresponding increase in real income, leading to a reduction in purchasing power.

• Engages in relatively infrequent and irregular trading.
• Holds securities for a longer period, typically over six months.
• Uses predominantly personal funds for investing.
• Does not rely heavily on borrowed money to finance investments.
• Derives the primary source of income from employment or other activities, not from trading activities.
• Trading gains are secondary to the main source of income.
• Invests mainly for long-term capital appreciation and not as a primary business activity.
• Trading activity does not exhibit characteristics of professional or systematic trading.
• Capital gains from trading are generally tax-free.
• Dividends and interest income are taxable.

Basel-City:  Yes, you have to pay tax on lottery winnings. Income from lotteries and other games must be declared in the Securities Form W and transferred to the main tax form. Specific thresholds include:

• Winnings over CHF 1’056’600 from domestic lotteries and other games are subject to tax with withholding tax deduction.
• Winnings between CHF 1’000’000 and CHF 1’056’600 from domestic lotteries and other games, as well as all winnings from foreign lotteries and games, are subject to tax without withholding tax deduction.

Zurich: It depends on the amount you won:

• Gross winnings from approved Swiss lotteries (e.g., Swisslos, Euromillions) and from online casino games are tax-free up to CHF 1’033’000 for cantonal taxes or CHF 1’056’600 for federal taxes. Only the portion of winnings exceeding these amounts is taxable.
• Winnings from lotteries and skill-based promotional games are tax-free up to CHF 1’000. If the value exceeds CHF 1’000 (cantonal tax) or CHF 1’100 (federal tax), the entire winnings are taxable.
• Profits from foreign casinos, lotteries, and sports betting are taxable. Non-cash and tangible winnings are tax-free up to CHF 1’000 (cantonal tax) or CHF 1’100 (federal tax), but if the value exceeds CHF 1’000 (cantonal tax) or CHF 1’100 (federal tax), the entire winnings are taxable.

Aargau:

• Individual gains from major games (lotteries) and from online casino games are taxable from CHF 1’000’000.
• Individual gains from lotteries not subjected to the Gambling Act, are tax-free if they do not exceed CHF 1’000.
• Gains from foreign gambling and private gambling are fully taxable.

Individuals residing abroad are subject to limited tax liability if there is an economic relationship between the individual and certain taxable objects located in Switzerland, such as business operations, permanent establishments, or real estate.

Basel-City – Yes, there are tax reliefs for low-income individuals in Basel-City. The wealth tax is reduced for single persons with a taxable income of less than CHF 14’000, married persons living together with a taxable income of less than CHF 20’000, and persons entitled to a child or support deduction with a taxable income of less than CHF 20’000. The reduction is calculated automatically: 75% for assets up to CHF 100’000, 50% for assets up to CHF 200,000, and 25% for assets up to CHF 400’000. Additionally, if the wealth tax and income tax on asset income together exceed 50% of the asset income, the wealth tax is reduced to this amount, but not more than 5‰ of the taxable assets.

Aargau – Yes, Aargau provides an additional social deduction for individuals with a net income of less than CHF 35,000. The deduction amounts are:

• Up to a net income of CHF 14’999: CHF 12,000
• For a net income between CHF 15’000 and CHF 19’999: CHF 7’500
• For a net income between CHF 20’000 and CHF 24’999: CHF 3’000
• For a net income between CHF 25’000 and CHF 29,’999: CHF 2’000
• For a net income between CHF 30’000 and CHF 34’999: CHF 1’000

Zurich – There are no tax reliefs for low-income individuals.

Zurich – Shares in undivided inheritances are not taxed separately. Income from undivided inheritances must be declared individually by each heir according to their share of the inheritance. Income earned from the day following the date of death until December 31st must be declared. Assets from undivided inheritances should be declared proportionally with corresponding documentation by December 31st. This includes the taxable value of properties, listed in the real estate inventory, and shares in securities and deposits, listed in the securities inventory. Debts and interest on debts of undivided inheritances should also be entered proportionally.

Basel-City – Shares in undivided inheritances must be reported using the “E Participation in an Heir Community” form, and the result must be transferred to the main tax return form. Their communities are not taxed separately; instead, each heir must declare their share of income and assets according to their inheritance quota. Assets as of the date of death and at the end of the tax period or liability must be indicated. Copies of the questionnaire must be attached to the personal tax return for each heir.

Aargau – Shares in undivided inheritances must be precisely specified and shown with a detailed breakdown, including real estate and other assets.

Basel-City: Yes, Pensions from occupational benefits (pension funds) that started before January 1, 1986 (Federal: January 1, 1987) and transitional pensions that started before January 1, 2002, are 80% taxable if at least 20% of the pension entitlement is based on own contributions. Otherwise, they are 100% taxable.

Zurich: Yes, 80 percent of the pensions of the 2nd pillar are taxable for life if the retirement took place before January 1, 2002, under the following conditions:

• If the pension started before January 1, 1987, and the insured person has contributed at least 20 percent of the total contributions themselves.
• If the pension started between January 1, 1987, and December 31, 2001, but the pension scheme already existed on December 31, 1985 (for direct federal tax: December 31, 1986), and the insured person has contributed at least 20 percent of the total contributions themselves.

In all other cases, the pensions are 100 percent taxable.

Aargau: Yes, only 80% of the pensions from the 2 pillar are taxable if at least 20% of contributions were made by the taxable person and the pension began before 2002, also pension should result from a pre-1987 pension relationship.

Basel-City:

• Deductible Donations: You can deduct voluntary donations or gifts to legal entities based in Switzerland that are tax-exempt for public or exclusively charitable purposes. This includes cash donations as well as in-kind contributions, provided they total at least CHF 100 per year. Additionally, donations to the Confederation, cantons, municipalities, and their institutions can be deducted. Also, Membership fees, mandate fees, party taxes, and donations to political parties are deductible. The maximum deductible costs are CHF 10’500 for the canton and CHF 10’400 for the federal per tax assessment.
• Limitation: The deduction for donations must not exceed 20% of your net income. Donations must be listed in Form Z Donations and are deductible in the tax period in which they are paid.

Zurich:

• Deductible Donations: Similar to Basel-City, deductible donations in Zurich include voluntary contributions of money and other assets to legal entities domiciled in Switzerland, which are exempt from tax liability for public or exclusively charitable purposes. The total donations must amount to at least CHF 100 in the tax period.
• Limitation: The total deductible donations cannot exceed 20% of your net income. You are required to attach a statement of charitable donations to your tax return.
• Contributions to Political Parties:
• State Tax (Zurich): Contributions and donations to political parties are deductible up to CHF 20’600 for taxpayers living in legally and factually undivided marriages, and up to CHF 10’300 for other taxpayers. Eligible political parties must be registered under Article 76a of the Federal Act on Political Rights, represented in a cantonal parliament, or have received at least 3% of the votes in the last cantonal parliamentary elections.
• Federal Tax: The maximum deductible amount for contributions to political parties is CHF 10’400 for both married taxpayers and other taxpayers.

Non-Deductible Donations (Both Basel-City and Zurich):

• Donations that do not meet the criteria of being voluntary contributions or gifts to tax-exempt entities for public or exclusively charitable purposes.
• Donations that do not reach the minimum threshold of CHF 100 in the tax period.
• Donations that exceed the 20% limit of your net income as specified by the tax authorities.

Aargau: Donations and membership fees to political parties can be deducted up to a maximum of CHF 10,300. Receipts do not need to be attached, but may be requested by the tax authority for verification purposes.

Basel-City: You can deduct 50% of the expenses for the purchase and maintenance of work clothes.

Zurich: You can deduct expenses for work clothing as part of the general category of additional occupational expenses. This deduction is 3% of the net salary according to the salary statement, with a minimum of CHF 2’000 and a maximum of CHF 4’000. If you claim that actual expenses exceed this fixed allowance, you must fully substantiate these occupational expenses and include a statement of actual expenses with your tax return.

Aargau: A lump-sum deduction of 3% of the net salary is granted to cover general professional expenses for the main occupation. The deduction is at least CHF 2’000 and a maximum of CHF 4’000 per year.

The lump-sum deduction includes costs for professional tools (including IT equipment), professional literature, private office space, work clothes, special wear and tear on shoes and clothing, and heavy labor costs.

Aargau – A flat-rate deduction is available for buildings based on their age:

• 10% of gross rental income or imputed rental value for buildings up to 10 years old as of January 1, 2023.
• 20% of gross rental income or imputed rental value for buildings over 10 years old as of January 1, 2023. Actual costs for maintenance and investments in energy-saving measures are deductible, provided they are not subsidized. Costs for conservation work due to legal requirements are also deductible, but subsidies received must be deducted from the declared costs.

Actual costs: maintenance costs include only value-preserving expenses. Investments in energy-saving and environmental protection measures are also deductible if they are deductible for federal taxes.

Zurich – Expenditures contributing to energy efficiency and renewable energies are deductible, assuming they are not subsidized. This includes costs for demolition and disposal of construction waste for replacement construction.

Basel-City – Deductible expenses include:

• Repairs and renovations that do not increase property value.
• Contributions to repair and renewal funds of condominium associations.
• Costs for energy-efficient improvements or compliance with legal environmental requirements, minus subsidies.
• Property taxes, insurance premiums, and property management compensation. Investment costs for energy savings or environmental protection, as well as demolition costs, can be carried forward for up to two tax periods if not fully deducted in the initial year.

Zurich – Yes, deductions apply to renovations in Zurich if actual expenses are claimed. Deductible expenses include those related to efficient energy use, renewable energies, and demolition costs for replacement constructions, provided they are not subsidized. Expenses for energy conservation and environmental protection can be carried forward to the following two tax periods if not fully deducted in the year incurred. Costs for heritage conservation work as per legal provisions are also deductible, provided they are not subsidized.

Basel-City – Yes, deductions apply to renovations in Basel-City. Deductible expenses include those for repairs and renovations that do not increase the property’s value and contributions to the repair and renewal fund of condominium associations, provided there is no entitlement to a refund.

Aargau – Yes, deductions apply to renovations in Aargau. Deductible expenses include costs for repairs and replacements of buildings and attached parts, maintenance of surrounding areas, contributions to the renewal fund of condominiums (under specific conditions), property insurance premiums, recurring contributions for road maintenance, chimney sweeping costs, service contracts for heating systems, and demolition costs in anticipation of a replacement building. However, investments that increase the property’s value (except energy-saving measures), and acquisition and replacement of non-building-related items like furniture are not deductible.

Basel-City – Contributions to pension schemes in Basel-City are deductible. This includes deductions for state pension (AHV/IV/EO), occupational pension (Pension Fund), and tied private pension (Pillar 3a). Contributions to AHV, IV, and EO are deductible for both employed and non-employed individuals, provided they haven’t been already considered in other income sections.

Deductions for occupational pension contributions (Pension Fund) are allowable if not already considered in income from employment. Contributions to Pillar 3a are deductible up to certain limits: CHF 7’056 for individuals affiliated with an occupational pension institution (Pension Fund), or up to 20% of earned income with a maximum of CHF 35’280 for those not affiliated with an occupational pension institution.

Contributions must be substantiated with receipts or certificates from the respective pension institutions.

Aargau – Contributions to Pillar 2 and Pillar 3a pensions in Aargau are deductible. For Pillar 2, deductions are possible for purchasing service years and additional purchases, not already included in the net salary. For Pillar 3a, deductions depend on whether the taxpayer is affiliated with a professional pension institution or not, with specific maximum limits. Receipts from the pension institution must be submitted with the tax return to claim these deductions.

Zurich – Pension contributions in Zurich are deductible to encourage retirement savings. Here’s how it works:

• 2nd Pillar (Occupational Pension): Contributions to the mandatory occupational pension plan (AHV/IV/EO and ALV) are deductible if not already reduced from the income.
• 3rd Pillar A (Tied Pension Plans): Contributions to private pension plans are deductible up to:
  • CHF 7’056 for those in occupational pension plans.
  • 20% of earned income, capped at CHF 35’280 for those not in occupational plans.

Basel-City: in Basel-City, expenses related to the professional use of a private office can be deducted if certain conditions are met:

1. Conditions for Deduction:
   • There must be no feasible way to conduct professional work at the regular workplace.
   • A distinct office space must be dedicated primarily and regularly to professional activities.
2. Calculation of Deductible Costs:
   • The deductible costs are calculated by dividing the rent without additional costs or imputed rental value by the total number of rooms, including attics.
   • If the office is within one’s own apartment, three-quarters of the calculated costs are deductible.
   • If the office is outside the residence, the entire costs are deductible.
   • No deduction is permissible for apartments up to 2½ rooms.
3. Documentation Required:
   • It is essential to submit the lease agreement and a schedule detailing the temporal and personal use of the apartment along with the tax return.

Aargau: Yes, in Aargau, a deduction for a home office can be claimed under specific conditions:

1. Conditions for Deduction:
   • A significant portion of professional work must be regularly conducted at home.
   • There must be a dedicated room within the private residence primarily used for professional purposes.
2. Calculation of Deductible Costs:
   • The deduction includes a portion of rent or home rental value, as well as ancillary costs such as heating and cleaning.
   • For homes with a rental contract, the rent is divided by the number of rooms plus two (for the kitchen and bathroom).
   • If there is no rental contract, an appraisal report is used to determine the number of room units.
   • Ancillary costs such as heating, cleaning, and lighting of the home office can be deducted at CHF 30/m²/year.
   • The deductible amount can be proportionally reduced if the room is not exclusively used for business purposes, the home office did not last the entire year, or the home office proportion of workload is less than 100%.
3. Documentation Required:
   • Deductions must be substantiated with relevant documentation.
4. Limitations:
   • Deductions cannot exceed the lump-sum deduction for professional expenses unless actual costs exceed this amount.
   • If the calculated home office deduction, combined with other professional expenses, exceeds the lump-sum deduction, actual costs replace the lump-sum deduction.
   • A combination of actual costs and the lump-sum deduction is not permissible.

Zurich – Home office expenses are handled based on specific rules:

• Occupational Expenses: Taxpayers can claim expenses related to home office under occupational expenses.
• Documentation: Actual expenses incurred must be documented and detailed in the tax return.
• Criteria: Home office expenses are deductible if they are necessary for work purposes and not reimbursed by the employer.

Detailed documentation of expenses like rent, utilities, and maintenance should accompany the tax return if actual costs are claimed.

Basel-City: Deductible training and continuing education costs must be related to vocational and professional training, and private expenses are not included. Deductible costs include self-borne costs for vocational and continuing education, including retraining, up to CHF 18’900 for the canton and CHF 12’900 for the federal, provided certain conditions are met. Training and education should fall under vocational or professional education to be deductible.

Zurich: The deductible costs for vocational training and continuing education must be related to professional or vocational training. (CHF 12’400 for the canton and CHF 12’900 for the federal), provided certain conditions are met.  Deductible costs must be related to vocational training and continuing education, including retraining, and must be substantiated with a fully completed “Vocational Training and Continuing Education Costs” form.

Aargau: The deductible costs for vocational training and continuing education must be related to professional or vocational training.

Basel-City:

• Deductibility: The costs for glasses are considered deductible medical expenses. You can deduct medically necessary expenses such as glasses, provided they are not covered by health insurance or other insurances. Only the portion that you pay out-of-pocket (after deducting benefits from insurance) is deductible.
• Threshold: Medical and accident costs are deductible if they exceed 5% of your net income II (Section 719). This is your self-coverage amount, meaning expenses must exceed this threshold to be eligible for deduction.
• Documentation: You need to substantiate the expenses with receipts, such as service statements from health insurance or receipts from optical stores.

Zurich:

• Deductibility: Similar to Basel-City, you can deduct medical and accident expenses, including costs for glasses, provided they exceed the statutory deductible of 5% of your net income (Line 21 of the tax return).
• Documentation: Along with your tax return, you must submit a fully completed “Statement of Medical and Accident Expenses” form. This form requires detailed information and supporting documents, which may include statements from your health insurance company that detail your medical expenses.

Aargau: you can deduct the cost of glasses, but it must be claimed as a cost due to illness. Ensure that the cost is evidenced by receipts and reduced by any insurance benefits. The deductible excess applies to these costs, calculated based on your net income.

General Conditions:

• The deductibility of glasses and other medical expenses is contingent upon them being medically necessary and not reimbursed by health insurance or any other insurance.
• All three of these cantons require documentation to support the deduction, typically in the form of receipts or statements from health insurance providers showing the expenses incurred.

In summary, you can deduct the cost of glasses as part of your medical expenses in Aargau, Basel-City and Zurich, provided they meet the criteria of being medically necessary and exceeding the deductible thresholds specified by each canton. Remember to keep all relevant receipts and documentation to support your deduction claims.

Zurich – Household goods and other personal belongings, are tax-free. Only specific assets like paintings, collections, art, jewelry, boats, and aircraft are considered taxable and must be declared. Private motor vehicles (cars) must be declared at their current market value. Typically, the depreciation per year is 40% of the remaining value. Leased vehicles do not need to be declared.

Basel-City – Household items and personal belongings, including motor vehicles for daily use, are exempt from cantonal wealth tax. However, the entire movable and immovable assets are subject to wealth tax based on their status at the end of the tax period.

Aargau – Household goods are not considered taxable assets in Aargau. s. However, other assets such as paintings, collections, art, jewelry, boats, aircraft, and horses are taxable and must be declared with their market value specified in a separate list. Private motor vehicles (cars) must be declared at their current market value. Typically, the depreciation per year is 30% of the remaining value.

Basel-City – In Basel-City, commuting expenses between home and workplace are deductible under certain conditions. Generally, only costs for public transportation are deductible. For example, expenses for TNW U-Abo or SBB General Abonnement can be deducted. If public transportation is not available or its use is unreasonable due to specific reasons (like illness, disability, or distance), costs for a private vehicle can be deducted based on a mileage allowance (CHF 0.70 per kilometer for cars).

There’s a maximum cap on annual deductions for commuting expenses: CHF 3’100 for cantonal taxes or CHF 3’200 for federal taxes. If a business vehicle is provided by the employer free of charge, no travel cost deduction is allowed. Detailed substantiation with a logbook and service invoices is required for vehicle-related deductions.

Aargau – Commuting costs in Aargau can be deducted if using public transportation, a private bicycle or small motorcycle, or a private car/motorcycle for commuting. The deduction is limited to CHF 7’000 per year (CHF 3’200 for federal tax) and requires receipts or documentation. Additional conditions apply, such as the impracticality of public transport or health reasons, which must be supported by appropriate documentation.

Zurich – commuting expenses between home and workplace are deductible under certain conditions. Employees can claim these expenses in their tax returns using the following guidelines:

• Public Transportation: Subscriptions for public transportation (train, tram, bus) are fully deductible if used regularly.
• Private Vehicles: Costs for using private vehicles (car or motorcycle) can be deducted in exceptional cases where public transportation isn’t available, or it significantly saves time. The deductible amount for car travel is CHF 0.70 per kilometer.

There are specific limits for deduction: CHF 5’000 for cantonal taxes and CHF 3’200 for federal taxes.

Basel-City – Charitable donations made to tax-exempt Swiss institutions are deductible in Basel-City. This includes voluntary donations or gifts to entities that serve public or exclusively charitable purposes. Donations must total at least CHF 100 per year to be deductible.

Both cash donations and in-kind contributions are eligible for deduction. Donations to political parties are also deductible within specified limits. The maximum deduction for donations is subject to 20% of the net income.

Donations must be substantiated with proper documentation, and a list of eligible institutions is provided by the Basel-City tax administration.

Aargau – Yes, contributions to recognized political parties in Aargau are tax-deductible up to a maximum of CHF 10’100 per year. Additionally, membership fees for professional associations up to CHF 300 per year can also be deducted. Receipts or payment evidence must be included with the tax return to claim these deductions.

Zurich – Charitable donations are tax-deductible in Zurich, provided they meet the following criteria:

• Minimum Amount: Donations must be at least CHF 100 in the tax period.
• Maximum Deduction: Up to 20% of the net income can be claimed as deductions for charitable donations.
• Eligible Recipients: Donations must be made to Swiss federal, cantonal, or municipal entities, or other Swiss legal entities exempt from tax for public or charitable purposes.

Taxpayers need to provide a statement of charitable donations along with their tax return to claim this deduction.

The canton where the deceased had their last residence typically levies inheritance tax on movable property. Real estate is taxed in the canton where it is located. For gift tax, the canton where the donor resides at the time of the gift levies tax on movable property, while the canton where real estate is situated taxes gift transfers of real estate.

Most Swiss cantons levy both inheritance and gift taxes, often using progressive tax rates based on the degree of relationship between the donor/decedent and the recipient. However, some cantons like Lucerne exempt gifts from taxation but include them in the inheritance tax calculation if made within five years before the decedent’s death. Cantons such as Schwyz and Obwalden levy neither inheritance nor gift taxes.

Tax rates for inheritance and gift taxes in Switzerland are typically progressive, meaning they increase with the size of the inheritance or gift and sometimes based on the relationship degree between the donor/decedent and the recipient. Some cantons, such as Uri, Nidwalden, Appenzell Ausserrhoden, Appenzell Innerrhoden, and St. Gallen, use linear tax rates based on the relationship degree.

Exemptions and deductions vary widely across cantons. Generally, surviving spouses or registered partners are exempt from these taxes in all cantons. Direct descendants are often exempt from inheritance and gift taxes in most cantons (with exceptions in Appenzell Innerrhoden (CHF 300,000 deduction), Vaud (CHF 250,000 exemption, then a regressive deduction up to CHF 500,000), and Neuchâtel (CHF 50,000 deduction). In Lucerne, only municipalities can levy tax on the inheritance of direct descendants, with a CHF 100,000 exemption). Direct ancestors may also benefit from exemptions in certain cantons (Uri, Nidwalden, Zug, Fribourg, Solothurn, Basel-Landschaft, Appenzell Ausserrhoden, Graubünden, Aargau, Ticino, Valais, and Geneva).

Inheritance tax assessment in most cantons is based on an inventory of the estate created at the time of the decedent’s death. Gift tax, on the other hand, is assessed based on a tax return filed by the recipient of the gift. Specific rules may apply for certain types of assets, such as securities, real estate, and insurance benefits, where exceptions to market value calculations exist in some cantons.

No, capital gains from the sale of movable private property such as securities or paintings are tax-free at both the federal and cantonal levels in Switzerland. This exemption applies uniformly across the country, promoting investment and transactions in movable assets.

In Switzerland, all motor vehicles and trailers must be registered, and they are subject to an annual motor vehicle tax in every canton. The tax liability rests with the registered owner of the vehicle, as indicated on the registration certificate and license plates. Unlike in some neighboring countries, Swiss license plates are tied to the owner rather than the vehicle itself when ownership changes.

The tax amount varies significantly across cantons and is based on technical specifications such as taxable horsepower, kilowatts, engine displacement, payload, weight, and environmental criteria. Certain vehicle types, such as electric or hybrid vehicles, may be exempt from the tax, or they may qualify for tax reductions based on criteria like CO2 emissions or energy efficiency ratings.

The entertainment tax in Switzerland is a levy imposed on paid public events. It can be charged either as a percentage of ticket sales (usually 10% of the ticket price or gross revenue) or gross revenue or as a flat fee. Cantons such as Fribourg, Appenzell Ausserrhoden, Ticino (for cinemas only), and Neuchâtel collect this tax directly. In other cantons like Lucerne, Solothurn, and Vaud, it is an optional municipal tax.

The tourism promotion levy is levied in Appenzell Innerrhoden and Geneva on businesses benefiting from tourism-related economic activities. This levy is calculated based on the economic benefit derived from tourism and aims to fund tourism development and promotion initiatives. Municipalities in several other cantons including Bern, Lucerne, Glarus, Fribourg, Graubünden, Ticino, Vaud, and Valais also have the option to impose similar levies.

Most Swiss cantons impose a fire service replacement levy, collected either by the canton or municipality. This levy is typically paid by individuals liable for fire service duty who do not actively serve in the fire service. Cantons such as Zurich, Basel-Stadt, Ticino, Vaud, and Geneva do not impose this levy.

Pillar 3a contributions reduce your tax burden by allowing you to deduct these contributions from your taxable income on your tax return. This deduction lowers the amount of income that is subject to taxation, thereby reducing the overall tax you owe.

For example:

• Taxable Income: CHF 100’000
• Pillar 3a Contribution: CHF 7’056 (the maximum allowable contribution for an employee with a pension fund in 2024)

By contributing CHF 7’056 to a pillar 3a account, you can deduct this amount from your taxable income:

• New Taxable Income: CHF 100’000 – CHF 7’056 = CHF 92’944

Assuming a marginal tax rate of 20% (which can vary based on your canton, municipality, and the level of taxable income), the tax savings calculation would be:

• Tax Savings: CHF 7’056 x 20% = CHF 1’411.20

Therefore, by making a contribution of CHF 7’056 to a pillar 3a account, your taxable income is reduced to CHF 92’944, leading to an estimated tax saving of CHF 1’411.20 at a marginal tax rate of 20%. The actual tax savings can vary depending on specific tax rates and deductions in your canton and municipality.

To summarize:

• Original Taxable Income: CHF 100’000
• Pillar 3a Contribution: CHF 7’056
• New Taxable Income: CHF 92’944
• Estimated Tax Savings: CHF 1’411.20

Your contributions to the 2nd pillar are automatically deducted from your gross salary. These contributions are tax-deductible, which means they reduce your taxable income for the year.

Example:  If your gross salary is CHF 100’000 and you contribute CHF 7’000 to your 2nd pillar, your taxable income is reduced to CHF 93’000.

Employer contributions to your 2nd pillar are not considered taxable income. This effectively increases your compensation without increasing your tax liability.

Example: If your employer contributes CHF 7’000 to your pension fund, this amount is not added to your taxable income.

Suppose your annual salary is CHF 100’000, and you contribute 7% to your 2nd pillar while your employer matches this amount.

• Employee Contribution: CHF 7’000 (7% of CHF 100’000)
• Employer Contribution: CHF 7’000
• Taxable Income Reduction: CHF 100’000 – CHF 7’000 = CHF 93’000
• Tax Savings: Assuming a marginal tax rate of 20%, the tax savings would be CHF 1’400 (20% of CHF 7’000)

If you also make a voluntary buy-in that does not exceed the maximum contribution amount listed by the pension funds in the pension certificate for each year, you are allowed to deduct this amount from your taxable income. Suppose your voluntary buy-in amounts to CHF 20’000. The calculation would then look as follows:

Additional Taxable Income Reduction: CHF 93’000 – CHF 20’000 = CHF 73’000

• Additional Tax Savings: CHF 4’000 (20% of CHF 20’000)
• Total Tax Savings: CHF 5’400 (CHF 1’400 + CHF 4’000)

In this example, by making regular contributions and a voluntary buy-in, you significantly reduce your taxable income and achieve substantial tax savings.

Contributions to the 2nd pillar (occupational pension plan) are obligatory in Switzerland for most employees. All employees who earn an annual salary above a certain threshold (CHF 22’050 as of 2024) are required to participate in a 2nd pillar pension plan. This requirement applies to both Swiss citizens and foreign nationals working in Switzerland.

Employers are legally required to offer a 2nd pillar pension plan to their eligible employees and to make contributions to this plan. A portion of your salary is automatically deducted and contributed to your pension fund. The exact amount depends on your age, your income level, and the specific pension plan provided by your employer.

Employers must contribute at least an equal amount to the employee’s contribution. In some cases, employer contributions are higher than those of the employees. The contribution rates for the 2nd pillar increase with age to ensure sufficient savings for retirement. Typical contribution rates are:

• Up to age 25: Only risk contributions (for disability and death benefits), no savings contributions.
• Age 25 to 34: Savings contributions start, typically around 7% of the insured salary.
• Age 35 to 44: Savings contributions increase, typically around 10% of the insured salary.
• Age 45 to 54: Savings contributions further increase, typically around 15% of the insured salary.
• Age 55 to 64/65: Savings contributions peak, typically around 18% of the insured salary (coordinated salary, which means the gross salary after coordinated salary deduction).

For example:

• Employee Salary: CHF 60’000 annually
• Coordinated Deduction: CHF 25’725
• Insured Salary: CHF 60’000 – CHF 25’725 = CHF 34’275
• Contribution Rate: Assume 7% for age 30
• Total Contributions: 7% of CHF 34’275 = CHF 2’399.25 annually
• Employee Contribution: 50% of CHF 2’399.25 = CHF 1’199.63 annually
• Employer Contribution: at least 50% of CHF 2’399.25 = CHF 1’199.63 annually

Withdrawals from a pillar 3a pension plan are allowed under the following circumstances:

• Retirement (up to 5 years before official retirement age)
• Purchasing residential property
• Becoming self-employed
• Permanent departure from Switzerland
• Disability
• Death (beneficiaries receive the funds)

Each of these scenarios has specific requirements and processes, so it’s important to plan ahead and understand the rules governing your pillar 3a account.

When it comes to withdrawing the money from pillar 3b, there are no such restrictions. It can be done at any time.

Withdrawals from a 2^nd pillar pension plan are allowed under the following circumstances:

1. Retirement (regular or early)
2. Purchasing residential property (buying, building, renovating, or repaying a mortgage)
3. Becoming self-employed
4. Permanent departure from Switzerland
5. Disability
6. Death (beneficiaries receive the funds)

Each scenario has specific requirements and conditions, so it’s essential to plan ahead and understand the rules governing your 2^nd pillar pension plan.