Swiss Taxation

Switzerland generally does not impose taxation of bank accounts held by non residents. In this section we will outline the personal taxes you may be liable for by owning a property or having investments in Switzerland. Which ever taxation may apply to you, the Swiss taxation should always be a beneficial option when compared to an EU country such as the UK.

Taxes on investments - if you invest via your Swiss account.

EU residents. If you live within the EU there is a withholding tax to pay on the interest gained only on certain investments. Your account manager can explain this to you in more detail when you open your account. This taxation is paid by Switzerland to the EU as an agreement that Switzerland would not lift the private information of customers accounts.

Swiss withholding tax (Swiss residents). This is up to 35% flat rate is mainly concerning Swiss residents and the interest gained on investments in Swiss companies or other profits gained, note that profit made on shares is not generally taxable as a Swiss resident unless the authority sees you a professional trader. This taxation will rarely apply to you as you will probably not invest in a Swiss company and even if you do it is possible to hold your investment in a different currency or place the money in a 'money market fund'. These funds are very low risk, very liquid and have returns from 2-5%. Your account manager can explain this to you in more detail when you open your account.

A US person. If you are a US person, which means you are a US citizen/your official residence is the US/you are for any reason subject to US taxes, you may not invest in US securities from your Swiss bank account without declaring it to the IRS. Your account manager can explain this to you in more detail when you open your account.

Taxes on income from property rental - as a non resident

For information on annual costs of an apartment property see the property guide section.

For your annual taxation on your property the rough figure is between 0.8-1.3% of the purchase price.

As a non resident owner you pay a calculated rate on various factors, this you pay if you rent your property or not. If you do rent your property you will not pay any more tax on the income.

You are liable to the Swiss government for tax on the property in Switzerland. All cantons have different laws and possibilities so when you have found the property you desire you can then enquire about the tax rules in that area. This information only serves as a guide.

The taxation is divided up between three bodies.

• The Swiss government
• The Canton
• The Commune/Gemeinde

Taxation General - as a Swiss resident

There are two basic options if you do decide to become a Swiss resident regarding your taxation.

Option 1: may be that you can choose a flat rate tax, or Fiscal deal.

You must not to be actively working in Switzerland. You should have a permanent yearly income of more than 80,000 CHF.  The taxable value is then calculated as an equation based on either the rental of your property or the rental potential of your property and other factors to determine what level you are taxed at. Then you will be taxed at the local levels on this value.

As a rule it is hard to obtain a tax deal lower than 60-80,000 CHf /pa. Thus this form of taxation/residency only suites those with considerable wealth.

However these rates vary in each area and are always open to negotiation with the canton.

Option 2: If you are an EU passport holder you may become a Swiss resident and go on the standard Swiss taxation system, for which the rules and regulation vary from canton to canton.

If you are not an EU passport holder then obtaining Swiss residency is now very difficult. Please contact us for information.

Other taxes

Inheritance Tax

Death duty is very low and often less than 5-10% of the purchase price of the property. However this law is under change in Switzerland and is already abolished in many cantons.

Capital Gains Tax

The tax to be paid varies from canton to canton but in the Valais and Vaud it starts in the first year at 35% of the net profit, then 18% after 5 years and 15% after 10 years down to 7% after 24years.

It is possible to off set costs such as renovation works on your property from the capital gain so it is very important to keep all the receipts you have relative to your property as they may save you money in the future!.

On the resale of a property the notary must by law withhold 5% of the sale price. The tax is then calculated on the difference between the sale price and the cost price, called net profit, you will then be informed if you owe more tax or if you will recieve money back.

Cost price = purchase price+purchase costs+extras+commission paid for the resale.