Expatriate Taxation in Switzerland

The Swiss taxation system is unlike any other and there are a number of important tax deductions to be aware of, including: 

• Work related expenses 
• Contributions to Pillar 2 (occupational pension) 
• Contributions to Pillar 3a (private pension) 
• Contributions to Pillar 3b (Canton dependent) 
• Interest on debt; mortgages, car and personal loans 
• Deductions for children (under adult age or in full time education) 
• Disability costs 
• Insurance premiums (up to maximum limits) 
• Reclaiming withholding tax on investment income

Our tax experts can help you navigate these effectively to reduce your tax burden significantly.

This is essentially where two countries tax the same asset, income or financial transaction. 

A Double Taxation Treaty (DTT) between countries often mitigates dual liability, however these agreements are not set in stone, and are frequently renegotiated.

For many of our clients one of the biggest challenges is keeping up to date with these changes, understanding how it affects them personally, and setting up their assets in the most tax efficient manner.

The most common forms of tax on investments are income tax and capital gains tax. 

In Switzerland, capital gains tax only exists for immovable assets (property), however there is a 35% withholding tax on investment income such as interest and dividends. The tax can be reclaimed via an annual tax return, however it is then added to your income for the year and taxed at your appropriate rate. 

We specialise in utilising financial structures to defer, or avoid completely, these investment taxes.

On the back of US-led initiatives (namely FATCA), tax authorities worldwide have become cooperative and organised when it comes to sharing an individual’s tax information. 

The MCAA (Multilateral Competent Authority Agreement) saw 51 countries in the OECD – including Austria, Cayman Islands, Guernsey, Isle of Man, Jersey, Liechtenstein, Luxembourg and Switzerland sign an agreement to automatically exchange tax information.

In our experience, non or misreporting is largely non-criminal, and occurs unintentionally as the result of an inheritance, a family gift, or from not knowing the reporting rules. 

There are a number of legal, logical ways to protect your assets and our advisors can run through the options best suited to your needs with you.