Switzerland

Quick Facts

• Tax residency threshold: Establish domicile/usual abode in Switzerland, OR stay 30+ consecutive days with employment, OR stay 90+ consecutive days without employment
• What counts as "day": Consecutive stay thresholds ignore short absences
• Consequence: Residents (unlimited liability) taxed on worldwide income AND net wealth; nonresidents taxed only on Swiss-source income
• Unique feature: Switzerland taxes both income and wealth—a rare combination among developed countries
• Immigration status: Residence permit (B, C, etc.) does not automatically determine tax residency

Residency Rules Explained

Visa vs Tax Residency

Key Dates

• Tax year: Calendar year (1 January – 31 December)
• Filing deadline: Varies by canton (typically March or with extension available)
• Consecutive day counting: Short absences don't interrupt the 30-day or 90-day threshold
• Certificate of Tax Residence: You can request this to document status for treaty purposes

Common Pitfalls

• Assuming a residence permit automatically triggers tax residency — it doesn't
• Not understanding that consecutive day thresholds tolerate short breaks
• Missing the wealth tax requirement — you must report worldwide net wealth, not just income
• Overlooking cantonal variation — tax rates and rules vary significantly by canton and municipality
• Not considering lump-sum taxation (forfait fiscal) option if eligible
• Failing to account for 35% withholding tax on Swiss dividend and interest income
• Missing treaty tie-breaker rules if also resident in another country

Offshore & Expat Considerations

• Worldwide income AND wealth taxation: As a Swiss tax resident, you report all global income and net wealth (subject to exclusions under treaties)
• Wealth tax uniqueness: Switzerland is one of few developed countries that taxes net wealth annually. This is a significant ongoing obligation
• Lump-Sum Taxation (Forfait Fiscal): High-net-worth foreigners without substantial Swiss-source income may negotiate a lump-sum tax base tied to living expenses instead of normal taxation. Eligibility and rates vary by canton
• Withholding tax refunds: The 35% withholding on Swiss investment income is refundable for residents who declare the income in full on their tax returns
• Cantonal variation: Tax rates differ dramatically by canton. A canton like Zug has much lower rates than Geneva or Zurich. Your canton choice matters significantly
• Foreign real estate and business exclusions: Some foreign real estate, business income, or foreign permanent establishments may be excluded from Swiss taxation under domestic law or treaties
• Double taxation treaties: Switzerland has extensive treaties; tie-breaker rules (permanent home, center of vital interests, habitual abode, nationality) apply when another country also claims residency
• Treaty exclusions: Bilateral treaties may exclude or limit Swiss taxation of certain categories (pensions, real estate, dividend withholding) via treaty provisions