Everyday Money

These Are the Taxes You Pay in Switzerland

February 2, 2024 - Ralf Beyeler

In Switzerland, you pay taxes and duties to the federal government as well as to cantonal and municipal governments. Here, moneyland.ch provides an overview of the various taxes which individuals pay in Switzerland.

The Swiss federal government, the cantons, and municipalities all levy taxes and duties so that they can perform the responsibilities assigned to them. In addition to typical taxes like income tax and value-added tax, there are also a number of more curious taxes which many residents of Switzerland have to pay.

Because each canton makes its own tax laws, taxes can differ from one canton to another. This article only covers taxes which private individuals pay, either directly or indirectly. It does not cover taxes which only apply to companies.

Direct taxes

Tax-eligible individuals have to complete a tax return every year. The tax office calculates the taxes which you have to pay, with the general rule being that people with less wealth pay a lower percentage towards taxes than wealthier people. Based on the information on your tax return, you pay the following taxes:

  • Federal income tax

The federal government levies a direct federal tax on income. Private individuals collectively pay around 15 billion francs per year in federal income tax. Divided between adult residents, that figure translates into around 2140 francs per person and year. Around 13 billion francs of that money goes to the federal government, making up one-sixth of its total annual income. The rest goes to cantonal governments, which collect the tax on behalf of the federal government.

  • Cantonal tax

The cantonal tax – also referred to as the state tax in some cantons – is levied by the cantons on the income and wealth of private individuals. Wealth tax does not apply to all residents, because it is only levied on income which exceeds certain thresholds. Collectively, Swiss cantons collect nearly 28 billion francs of cantonal income taxes and 5 billion francs of cantonal wealth taxes. Spread across adult residents, that translates into 4600 francs of cantonal taxes per person and year.

  • Municipal tax

The municipal tax is the most important source of income for Swiss municipalities. Like cantonal governments, municipalities tax both the income and wealth of their residents. Together, Swiss municipalities collect a total of 19 billion francs in municipal income taxes and more than 3 billion francs of municipal wealth taxes every year. That equals more than 3000 francs of municipal taxes per capita, when spread across adult residents.

  • Church tax

In most cantons, residents who are members of recognized denominations have to pay a church tax as part of their tax bill. Church taxes are shown separately. In many cantons, church taxes are levied on members of the Protestant Church in Switzerland and the Roman Catholic Church by their respective denominations. Church tax is paid by members of the Christian Catholic Church in some cantons. In three cantons, members of Jewish congregations pay a tax. However, residents of Valais who are not members of the Catholic or the Swiss Reformed churches can obtain tax refunds if certain requirements are met. You must send an application to your municipal government each year in order to obtain possible refunds.

Individuals who are employed in Switzerland but are not Swiss citizens and do not have permanent residence do not pay the above-listed taxes directly to the tax office themselves. Instead, their employers deduct a withholding tax from their salaries.

Other direct taxes which are levied in Switzerland include:

  • Inheritances, gift, and estate taxes

The vast majority of Swiss cantons levy taxes on inheritances and gifts. The canton of Solothurn also has an estate tax. These taxes must be paid by the beneficiary who receives the inheritance or gift. Spouses are exempt from paying these taxes in all cantons, and most cantons have exemptions for children as well. Some cantons levy inheritance taxes when children inherit from their parents, but when an inheritance exceeds a certain threshold (between 50,000 and 300,000 francs). Switzerland’s cantons collect around 1.3 billion francs per year in this way. That converts into 144 francs per resident.

  • Real estate gains tax

All cantons levy real estate gains tax when you sell a house, apartment, or a plot of land at a profit. You pay real estate gains tax in the canton where the property is located.

  • Property tax

Many cantons have property taxes. This tax applies in the canton where the property is located. Where you live does not play a role. Property taxes collectively bring cantonal and municipal governments a total of 1.3 billion francs per year. That comes to 180 francs per adult resident.

  • Property transfer tax

In many cantons, when you sell a property, you have to pay a property transfer tax. In some cantons, property transfers taxes may also be levied on a municipal level. The tax is levied by the canton or municipality in which the property is situated.

  • Road tax

All cantons have road taxes which owners of licensed vehicles must pay, but the size of this tax varies broadly. In many cases, electric and hybrid vehicles are either exempt from road tax, or benefit from tax reductions. In total, road taxes collectively bring cantons 2.3 billion francs per year. That translates into 360 francs per year for each automobile licensed in Switzerland.

  • Boat tax

In many cantons, a boat tax is levied on motorized boats, sailboats, and freighters. The total boat taxes collected by cantons add up to 35 million francs per year. That is 360 francs for every boat licensed in Switzerland.

  • Dog tax

Dogs are taxed in many cantons and municipalities. The amount you pay is based on the size and weight of your dog. Dog keepers collectively spend around 55 million francs per year on Swiss dog taxes. Spread out across all of the dogs living in Switzerland, that translates into 100 francs per dog and year.

  • Non-fire brigade tax

In many cantons you have to pay a non-fire brigade tax if you are eligible to join a voluntary firefighting brigade but do not.  This tax is levied both by cantons and by municipalities.

There are other taxes for individuals which you may also be billed for:

  • Serafe fee

Officially, the Serafe fee is not a tax. But in practice, paying this radio and television duty is mandatory for all households. The fee is 335 francs per household and year. Even welfare recipients and refugees are required to pay Serafe fees. Only households with recipients of supplemental OASI benefits are exempted from this fee. In total, Swiss households pay nearly 1.1 billion francs per year. That is 125 francs per person.

  • Military service exemption tax

Swiss men who do not perform the required military or civil service are, in many cases, required to pay a military service exemption tax. You pay this tax up until the age of 37. The maximum term over which you can be made to pay military service exemption tax is 11 years. The tax is equal to 3 percent of your taxable income as per federal income tax, but your tax rate may be reduced if you participate in civil defense services. A total of 180 million francs of military service exemption tax is collected every year. That translates into around 40 francs per adult male resident.

Indirect taxes

Residents of Switzerland often pay taxes without even noticing it. These taxes are worked into the prices of goods and services, and are transferred to the tax administration by merchants. Normally, you are not shown what portion of the price is made up of taxes. In many cases, one product may be subject to several different taxes.

These are the taxes which the Swiss federal government levies indirectly:

  • Value-added tax

The value-added tax (VAT) is levied on the purchase of goods and services within Switzerland. Private individuals are the primary payers of value-added tax.

The tax rate varies depending on the category of goods or services you buy, but for most goods and services, it is equal to 8.1 percent of the product’s price. You pay less tax when you buy groceries, medicines, and books, with the rate for these purchases being 2.6 percent. A special tax rate of 3.8 percent applies to short-term accommodation . Some services – like many banking services, healthcare services, and rental homes – are exempt from value-added tax.

Swiss consumers collectively pay around 25 billion francs of value-added tax every year. That is 2840 francs per resident. Value-added tax is one of the federal government’s biggest sources of revenue, making up nearly one-third of its income.

  • Withholding tax on dividends and interest

The federal government levies a withholding tax as a security to ensure that wealth and returns from bank accounts and investments are properly taxed. A withholding tax equal to 35 percent of shareholder dividends and bond coupons is deducted before these yields are paid out. This 35-percent withholding tax also applies to bank account balances, but normally only when interest exceeds a 200-franc threshold.

However, you can claim full reimbursement of this withholding tax after you declare dividends and interest in your tax returns.

There are also withholding taxes for life annuities, pensions, insurance benefits, and in some cases winnings from games of luck and lotteries. Every year, the federal government collects nearly 7 billion francs in withholding taxes. That comes to around 750 francs per resident.  

  • Mineral oil tax and mineral oil surtax

The federal government levies a mineral oil tax on petroleum, other mineral oils, natural gas, and fuel like gasoline and diesel. You pay an additional mineral oil surtax of 30 centimes per liter when you buy gasoline or diesel. These two taxes combined bring the federal government around 4.3 billion francs per year. That translates into nearly 690 francs per car and year, on average, without accounting for electric vehicles.  

  • Stamp taxes

The federal government has three different stamp duties with which it taxes on investments in securities, and on insurance premiums. Two of these directly affect private individuals:

Stamp duties on securities transactions: When you buy and sell securities like stocks and bonds, the bank or broker charges you a stamp tax on behalf of the government. This tax is equal to 1.5 per mille of the transacted amount for Swiss securities, and 3 per mille for foreign securities. You have to pay half of this tax every time you either buy or sell securities. The Swiss federal government collects 1.35 billion francs of stamp duties on securities transactions every year. That translates into 150 francs of stamp tax per resident.

Stamp duties on insurance premiums: The federal government levies a stamp duty equal to 5 percent of every insurance premium paid for liability insurance and property insurance. A 2.5-percent stamp duty is levied on single-premium permanent life insurance with cash value. The insurance company normally lists the stamp tax as a separate cost on insurance bills. Each year, the stamp duty on insurance premiums brings the Swiss federal government 750 million francs. That translates into 85 francs per resident.

  • Tobacco excise tax

The tobacco tax is a tax on cigarettes, cigars, and tobacco which is levied by Switzerland’s federal government. Every year, the federal government collects 2 million francs in tobacco taxes. That translates into around 1000 francs per smoker and year.

  • Spirits tax

Spirits are taxed by the federal government at the rate of 29 francs per liter of pure alcohol. The tax for products which contain a maximum of 22 percent alcohol, the tax rate per liter of pure alcohol is half of that for spirits. The spirits tax rate for alcopops is 116 francs per liter of pure alcohol. The federal government collects around 300 million francs in spirits tax every year. That translates into 42 francs per adult resident.

  • Automobile tax

The federal government levies an automobile tax on every imported or locally-manufactured motor vehicle. The automobile tax equals 4 percent of the vehicle’s value. Electric vehicles are exempt from this tax. In 2021, the automobile tax added 310 million francs to the federal government’s coffers. That is around 1100 francs per new vehicle (excluding electric vehicles).

  • Gambling tax

Casinos and other gambling service providers are subject to a gambling tax. In 2021, the Swiss federal government levied 249 million francs in gambling tax, while the cantons collected an additional 26 million francs. That translates into 38 francs per adult resident.

  • Beer tax

Beer and beer cocktails are also taxed. Depending on the kind of beer and the size of the brewery, the beer tax is between 10 and 34 centimes per liter. The beer tax brings the federal government around 110 million francs per year. That is 15 francs per adult resident.

In addition to federal government’s indirect taxes, you also pay indirect taxes to cantonal and municipal governments.

  • Amusement tax

Only a few of Switzerland’s cantons still levy amusement taxes or entertainment taxes. These taxes are levied on things like cinema, concert, and theater tickets. Before the corona pandemic, consumers paid around 35 million francs per year in amusement taxes. That comes to around 4 francs per resident.  

  • Tourist tax

Municipalities which levy tourist taxes can be found in nearly all of Switzerland’s cantons. You have to pay the tourist tax when you stay in a hotel, hostel, Airbnb accommodation, or holiday home in a municipality which charges this tax. Normally, the tourist tax is collected by the hotel (or other accommodation provider) in addition to your bill, and they forward it to the municipal government for you.

More on this topic:
How to save on taxes in Switzerland
Swiss federal income tax calculator

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Expert Ralf Beyeler
Ralf Beyeler is the telecom expert at moneyland.ch and also covers other areas of personal finance.
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