Forms of Tax
Several forms of tax are known and frequent in Switzerland. The website of the Swiss Authorities gives an overview of the different taxes. Below we will only cover those forms of tax that are related to your wealth and income.
Income and Wealth Taxes
Due to the Swiss federal system, taxes are imposed on three different levels:
Firstly on the level of the federation, where taxes are levied as specified in the federal constitution. This tax rate is identical and valid throughout the country.
Secondly on the cantonal level, where the 26 cantons independently levy taxes on wealth and income.
Thirdly on the municipal level, where each municipality individually imposes tax on wealth and income.
As a foreign national working in Switzerland your tax will be deducted directly from your income (tax at source). This refers to holders of permit B, cross-border commuters and everyone who earns an income in Switzerland but is not a resident. Being taxed at source means that your tax is deducted from your gross income and is directly paid to the tax authorities by your employer.
The tax at source rate depends on your canton of residence. Tariffs are assessed individually and depend for instance on your civil status, whether you have children and whether your partner is employed as well. There is also a church tax based on your religion (applicable only to the three Swiss national churches, which are Roman Catholic, Old Catholic and Protestant religions).
If you are living in Zurich, you will find more information on the website of the Canton of Zurich. If you live elsewhere, you can use the website of the Swiss Authorities and enter the name of your municipality in order to find out more.
If you're a foreign worker resident in Switzerland for tax purposes and your gross income exceeds CHF 120,000, a statutory assessment of your whole income and assets will be carried out retrospectively.
Foreigners who live in Switzerland and have a residence permit (permit C) need to declare their income and assets in a standard tax return (i.e. statutory assessment).
Swiss citizens as well as holders of a permit C become liable for taxation when reaching their 18th year of age or when taking up gainful employment. Every calendar year they have to fill in a tax return form which they are sent directly by the tax authorities. After filing the form, the taxpayer receives a bill to be paid by the end of the year. Failing to hand in the form on time may result in an exceedingly high assessment by the tax authority and even a penalty.
Additional information on tax returns can be found on the website of the Swiss Authorities online.
Taxes on Scholarships
Scholarships may be exempt from taxation if they merely cover the necessary living expenses including educational costs and considering available own resources. Additional scholarship benefits similar to a salary or remuneration may be subject to taxation.