Taxes in Switzerland are levied by the Swiss Confederation, the cantons and the municipalities.
Legal framework Fiscal sovereignty Switzerland is a federal republic in which the sovereignty of the constituent states (the cantons) is limited by the enumerated powers delegated to the federal state (the Confederation) through the federal constitution. Consequently, the original authority to levy taxes is vested in the individual cantons of Switzerland through their constitutions.Locher, 49. Within the bounds of the authority delegated to them by cantonal law, the municipalities may also levy taxes. The extent of that authority varies from canton to canton.Locher, 50. While the formal framework of the most important cantonal direct taxes has been harmonised through the 1990 Federal Tax Harmonisation Law, the cantons (and, as the case may be, the municipalities) remain free to set their tax rates or establish new taxes, except on tax objects already taxed under federal law.Locher, 89 et seq.
Since World War II, the federal constitution authorizes the Confederation to levy a number of taxes, the most significant of which are an income tax, a withholding tax and a value added tax. However, Switzerland is unique among modern sovereign states in that the authority to levy these taxes is limited in duration and extent.Linder, 263.Locher, 47 et seq. The Constitution imposes an upper limit on the federal tax rates and causes the federal authority to levy taxes to expire in 2035. A renewal of that authority requires a constitutional amendment, which must be approved in a popular referendum by both a majority of the popular vote and the cantons. If that renewal is not approved at the polls (as it has been six times since 1958), the Confederation itself will conceivably dissolve for lack of funds. All attempts to remove this limitation by amending the constitution to provide for a permanent federal authority to levy taxes have been rejected in Parliament or – no less than five times – by popular vote, most recently in 1991.Locher, 46.
Constitutional limits to taxation The federal constitution imposes certain limits on taxation at the federal, cantonal and municipal levels. To begin with, it provides that no tax may be levied except where provided for by federal, cantonal or municipal statute.Amonn, 26. Because statutes can at all levels be made subject to a popular referendum, Swiss tax rates are in practice set directly by the voters through instruments of direct democracy.Linder, 161 and 263.
The constitution mandates that taxation must be general and equal in nature, and it must be proportionate to one's ability to pay. The Federal Supreme Court has interpreted this as prohibiting a regressive tax, although flat rate taxes (as instituted in several cantons) are held to be constitutional by tax law scholars. Moreover, double taxation by several cantons is constitutionally prohibited, as is a confiscatory rate of taxation.
Direct taxes on natural persons All people resident in Switzerland are liable for the taxation of their worldwide income and assets, except on the income and wealth from foreign business or real estate,Amonn, 61. or where tax treaties limit double taxation. For tax purposes, residence tax may arise if a person stays in Switzerland for 30 days, or for 90 days if he/she does not work.Amonn, 33. Moreover, non-residents are also taxed on certain Swiss assets or on the income from certain Swiss sources, such as from real estate, permanent business establishments or pensions.Amonn, 34. The income and assets of spouses are pooled and taxed jointly, but at a lower rate to offset the effects of tax progression.Amonn, 65. Generally, Switzerland offers "an advantageous tax system" (as per Lindemannlaw consultants).
Income tax Either a progressive or proportional income tax is levied by the Confederation and by the cantons on the income of natural persons. The income tax is imposed as a payroll tax on foreign workers without a permanent residence (C) permit, and in the form of a withholding tax on certain transient persons, such as foreign musicians performing in Switzerland.
Taxable income includes all funds accruing to a person from all sources, in principle without deduction of losses or expenses,Amonn, 35. and including the rental value of a house lived in by its owner.Amonn, 52. However, capital gains on private property (such as profits from the sale of shares) are tax-free, except where the cantons levy a tax on real estate capital gains.Amonn, 40. Certain expenses are also deductible. These include social security or pension fund payments,Amonn, 46. expenses related to the gain of income (such as employment expenses and maintenance costs of real estate) and alimonies.Amonn, 58. Gifts and inheritances are also exempt from the income tax, but are subject to separate cantonal taxes.
Non-working foreigners resident in Switzerland may choose to pay a lump-sum tax instead of the normal income tax. The tax, which is generally much lower than the normal income tax, is nominally levied on the taxpayer's living expenses, but in practice (which varies from canton to canton), it is common to use five times or seven times the rent paid by the taxpayer as a basis for the lump-sum taxation.Amonn, 59.
In 2011, the federal income tax varied from a bracket of 1% (for single tax payers) and 0.77% (for married taxpayers) to the maximum rate of 11.5%. Individuals earning below 13,600 and couples earning below 27,000 Swiss francs were exempt. On cantonal level, tax rates vary heavily, Obwalden adapted a 1.8% flat tax on all personal income following a cantonal referendum in 2007. In most cantons, the rate is proportional with a maximum rate of 6.5% in Bern, whereas in Zurich it was 13% and in Geneva 17.58-.76% (depending upon taxes as single or jointly).
Wealth tax A proportional wealth tax of around 0.3 %to 0.5%Mäusli-Allenspach, 149. is levied by the cantons on the net worth of natural persons. The tax is levied on the value of all assets (such as real estate, shares or funds) after the deduction of any debts.Mäusli-Allenspach, 145.
In November 2025, Swiss voters rejected a proposal to tax inheritances and gifts of more than 50 million Swiss Francs at 50%.
Church tax
Most cantons levy a church tax (Kirchensteuer / impôt ecclésiastique / imposta di culto) on the registered members of the religious communities they recognise under public law, collected through the cantonal tax system. The recognised bodies are usually the Roman Catholic Church and the Evangelical Reformed Church, and in a number of cantons also the Christian Catholic (Old Catholic) Church and the Jewish communities; recognition has generally not been extended to other faiths.
The tax is levied only on members of the recognised communities; a person of no religious affiliation does not pay it. It is assessed as a proportion of the cantonal or income tax and varies by canton and denomination—in Bern, for example, it is about 20.7 per cent of the income tax for Catholics and 18.4 per cent for Protestants. Payment is voluntary in Ticino, Neuchâtel, and Geneva, while the canton of Vaud levies no church tax and instead meets church costs from general taxation. In most cantons legal entities are also liable, though several—including Basel-Stadt, Schaffhausen, Appenzell Ausserrhoden, Aargau, and Geneva—exempt them; the taxation of companies has been politically contested.
Taxes by canton Total federal, cantonal, municipal and church taxes in the cantonal capital for various gross incomes, in CHF (2014) Income of a single person Income of a married couple with 2 children Cantons 20,000 40,000 60,000 80,000 100,000 200,000 500,000 20,000 40,000 60,000 80,000 100,000 200,000 500,000 477 2,149 4,577 7,629 11,018 31,411 108,877 48 85 1,092 2,791 4,882 20,624 90,318 511 3,847 7,567 11,369 15,483 39,496 120,369 0 0 1,756 5,336 8,517 28,806 106,809 278 3,025 6,170 9,370 12,552 29,586 87,002 50 50 1,319 3,634 6,331 22,204 79,707 266 2,944 5,367 8,001 10,589 23,817 64,149 100 100 1,545 4,193 6,752 19,303 59,634 545 1,952 3,862 6,120 8,583 21,211 57,276 0 54 1,125 2,619 4,024 15,761 53,702 340 2,596 5,042 7,502 9,907 22,029 58,451 0 0 1,604 4,199 6,523 18,578 54,999 361 2,530 5,137 7,905 10,709 25,455 65,696 50 50 812 2,756 5,196 19,159 62,707 581 2,837 5,572 8,874 12,164 30,297 94,726 0 357 2,361 4,390 6,793 23,237 81,708 148 1,049 2,197 3,586 5,729 19,488 51,434 0 0 0 359 1,059 6,943 45,645 601 3,372 6,893 10,986 15,443 40,909 111,188 0 124 1,406 3,633 6,242 27,191 105,740 803 3,707 7,479 11,546 15,770 39,274 108,967 80 375 2,921 5,364 8,672 29,143 101,170 0 2,770 7,034 11,322 15,586 37,075 110,510 0 0 0 2,987 7,251 28,739 93,319 0 2,617 6,498 10,917 15,667 41,732 124,296 0 0 0 2,534 6,180 28,722 107,828 569 2,970 6,180 9,961 14,150 36,512 97,717 60 90 1,863 4,280 6,645 25,079 93,525 697 3,161 6,249 9,809 13,503 33,396 89,536 0 409 2,739 5,075 7,664 26,582 86,494 629 2,601 4,993 7,525 10,308 24,883 64,824 0 480 1,670 3,155 5,392 19,336 62,455 376 3,141 7,102 11,475 16,116 39,961 106,857 0 0 1,015 3,622 6,531 28,108 99,717 22 2,251 5,403 8,962 12,585 32,274 93,439 0 0 390 2,691 5,204 22,378 82,271 0 2,375 5,722 9,283 13,004 32,960 98,249 0 122 1,283 3,237 5,839 23,388 85,035 179 2,807 6,043 9,344 12,704 31,388 91,205 0 0 683 3,109 5,747 22,647 80,293 307 1,998 5,295 9,065 13,138 35,748 110,578 40 40 721 1,841 4,189 24,016 99,484 0 2,020 7,713 11,754 16,027 41,897 131,490 0 0 630 3,930 9,068 27,754 110,347 34 2,757 5,718 9,572 13,876 40,477 111,349 34 34 477 2,362 4,104 22,601 94,233 474 3,631 7,944 12,388 17,002 43,531 116,508 0 350 2,447 6,270 9,516 32,577 111,752 25 1,969 5,788 10,398 15,103 39,708 123,070 25 25 25 348 3,093 24,145 98,891 479 3,380 7,175 11,817 16,441 42,682 125,006 0 0 1,616 4,710 8,593 30,506 110,001 Federal taxes only 0 133 432 936 1,838 9,976 45,268 0 0 0 0 87 6,002 40,842
Corporate taxation
Switzerland has a "classical" corporate tax system in which a corporation and its owners or shareholders are taxed individually, causing economic double taxation. All legal persons are subject to the taxation of their profit and capital, with the exception of charitable organisations.Amonn, 69. Tax liability arises if either the legal seat or the effective management of a corporation is in Switzerland.Amonn, 70. To the extent non-resident companies have Swiss sources of income, such as business establishments or real estate, they are also liable for taxation. Conversely, as a unilateral measure to limit double taxation, profits from foreign business establishments or real estate are exempted from taxation.
Profit tax A proportional or progressive tax is levied by the Confederation (at a flat rate of 8.5%) and the cantons (at varying rates) on corporate profits. The tax is based on the net profit as accounted for in the corporate income statement, as adjusted for tax purposes. For instance, expenditures that have no business reason such as excessive depreciations, accruals or reserves, as well as disguised dividends are taxed as profits.Amonn, 71.
A number of provisions limit the double taxation of profits at the corporate level and contribute to Switzerland's tax haven status. To begin with, a "participation exemption" is granted to companies who hold 20 percent or more of the shares of other companies; the amount of tax due on the corresponding profit is reduced in proportion to the percentage of shares held.Amonn, 76. At the cantonal level only, a "holding privilege" applies to pure holding companies. They are exempt from the cantonal corporate profit tax. Moreover, cantonal law confers a "domicile privilege" on companies who are only administered in Switzerland, but whose business is conducted abroad; including shell corporations.Amonn, 79. The cantons tax only around 10 percent of the worldwide profits of such companies.
Capital tax