Personal taxation

Liability of individuals

Liability is the situation in which a person is obliged by law or administrative regulation to make a financial contribution to a public fund.

It represents the first stage in the examination of a person’s tax situation, and may be limited or unlimited. If a person is resident in Switzerland, he or she is subject to unlimited taxation. Unlimited tax liability may also arise from a stay in Switzerland, where the person is gainfully employed for at least 30 days, or is not gainfully employed for 90 days.

Our tax lawyer can advise you on the extent to which tax liability may affect your taxation, and examine the various options available to you.

Personal income tax

Personal income tax is the tax levied on the net income (gross income less authorized tax deductions) and capital gains of individuals. This tax represents a major source of revenue for the State.

It can result from limited or unlimited tax liability, just like personal wealth tax.

The Confederation, all cantons and municipalities levy a general income tax. In principle, it is calculated on the sum of all the taxpayer’s income, whatever its source. It takes account of the taxpayer’s economic capacity, taking into account factors such as the amount of income, the costs involved in acquiring it and family responsibilities, the taxpayer’s standard of living, general and social deductions, etc.

Communal income taxes are determined on the basis of cantonal tax laws, which are carried out by means of taxation valid for cantonal taxes.

Some income is tax-exempt at federal and cantonal level. Some of this income may, however, be subject to another tax, notably inheritance and gift tax.

Swiss tax legislation provides for and grants various types of deductions. These can be subdivided into expenses, general deductions and social deductions. These deductions apply at all levels and may vary from canton to canton. These deductions are deducted from income to reduce the annual tax burden.

Our tax lawyer can examine your situation in this respect and advise you on the tax deductions allowed.

Individual wealth tax

Since 1959, the Confederation has no longer levied a wealth tax on individuals, since combining it with cantonal and communal wealth taxes would have led to an excessive tax burden.

It is therefore a cantonal tax. There are 26 different legislations, and our tax lawyer will be able to guide you through them.

Switzerland’s 2,200 or so communes have “delegated” fiscal sovereignty, and also levy taxes. Communal taxes are levied on the same subjects as cantonal taxes, including wealth tax. For the most part, they are levied on the same legal basis as cantonal taxes, but at different rates, sometimes on the basis of their own rates, but more often through multiples of the cantonal rates or the cantonal tax due.

Moreover, these communal taxes are often as high or higher than cantonal taxes.

However, there is harmonization at cantonal level, with the setting of tax scales, rates and tax-exempt amounts remaining the responsibility of the cantons.

Certain items of wealth are exempt from taxation.

Like personal income tax, wealth tax can be levied on a limited or unlimited basis.

Swiss tax legislation provides for and grants various types of deductions. In principle, these can be subdivided into deductions for debts and social deductions. Wealth tax concerns the taxpayer’s net wealth, not gross.

Our tax lawyer can help you find your way around.