Know About The Tax System in Switzerland


Switzerland is a country that is known all around the world for providing high quality of life. This federal republic is considered a haven for those who want better returns with least tax deductions. It has engaged many individual into investment in the hope of better yielding. Although, numerous taxes are levied on the residents as well as foreign citizens, some of them that form a major part of the Taxation in Switzerland are stated below:-

  • Direct taxes– Direct taxes refer to those types of taxes which are levied on the individuals or the people residing in the country. These are in the form of income and property tax. Income tax as the name denotes is levied on income earned by the individual. This tax is levied on payroll and withholding tax on foreign inhabits who are not in possession of citizenship of the country. Another form of direct taxation is property tax, which is on assets possessed by the citizen. In this tax certain debts are deducted and then the computation is carried.
  • Corporate tax– Switzerland has developed as a country where most of theindividuals are willing to set up their corporate offices or initiate a venture in the country. But these initiations are under the purview of certain taxes namely corporate tax. Charitable organizations are exempted from paying of this tax. This corporate taxation also encompasses numerous other taxes namely profit and capital tax. Profit tax is levied on the net profit as earned by the organizations. Net profits can be obtained through the records maintained within an organization.Capital tax is levied on company’s ownership equity.
  • Federal Taxes– they refer to the taxes which are supplementary in most aspects. The federal tax includes value added tax, free holding tax, stamp and border duties and other miscellaneous taxes.

-Value added tax refers to tax levied on exchange of various commodities. This is levied at a rate of 8 percent. Distinct commodities have different rate of tax attached to them. Some commodities are also exempted from the purview of value added tax.For individuals interested in the stock market or who want to invest in lottery tickets, federal tax comes as an added overhead. The individual has to pay 35 percent of its earnings from such sources. Hence some liability does exist in these investments.
-Commercial transactions are not under the scope of tax exemption. They do attract certain tax.
-Miscellaneous taxes refer to taxes levied on import and export of beer, tobacco, spirit and other such commodities.
The authorities in Switzerland which are in command of levying taxes compriseof the Swiss confederations, the municipalities and the cantons. According to the constitution of the country these bodies are in command of issuing tax. Double taxation has also been prohibited in the country. In Switzerland, the citizen can enjoy benefits of low rate of taxes, tax exemption benefits and numerous other reductions. Hence Taxation in Switzerland has earned high credibility amongst potential business ventures. Know more about the taxation system here.


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