Revealed: The Swiss canton with the best tax rates for families

A widespread analysis has revealed which Swiss canton has the best taxation rate for families.

Published: 26 August 2020 16:45 CEST
Updated: 16 August 2021 17:05 CEST

Revealed: The Swiss canton with the best tax rates for families

The analysis, completed by newspaper Le Matin Dimanche, compared the tax paid by families at different income brackets.

The newspaper found that Zug had the best tax regime for families in various income brackets of all of Switzerland’s 26 cantons.

Zug is home to several large international companies and has a significant population of foreign workers.

Zug reduced its tax levels during the coronavirus pandemic.

READ: Switzerland’s strangest taxes – and what happens if you don’t pay them

CHF60,000

The first comparison was a married couple with two children on an income of CHF60,000 in cantons across Switzerland.

The family would pay zero income tax in Zug, as well as in Geneva.

Conversely, the family would pay CHF1,562 in Bern.

READ: This Swiss canton is about to become the world’s top tax haven

CHF125,000

A couple on the higher income of CHF125,000 with no children would pay CHF5,451 in taxes in Zug.

In Geneva, this amount would be three times higher – and four times higher in Neuchâtel.

In particular, the report notes how several French-speaking cantons levy large tax obligations on high earners.

In particular, Geneva, Lausanne and Neuchâtel have higher tax rates.

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The onset of winter will raise concerns for many in Germany about the cost of heating their homes, with memories of last year’s rocketing prices and concerns over domestic gas supply resurfacing.

But, compared to last year, the energy prices have now largely stabilised, though they are still higher than in 2021.

The stabilisation in prices is partly thanks to the government’s energy price cap which came into force earlier this year to cushion the blow of soaring energy prices by capping electricity costs at 40 cents per kilowatt-hour and natural gas at 12 cents.

The federal government plans to maintain this cap until the end of April, though this could be extended even longer, if necessary.

How high are heating costs expected to go this year?

For the current year, experts from co2online expect somewhat lower heating costs than last year.

Heating with gas, for example, is expected to be 11 percent cheaper in 2023 than in 2022, costing €1,310 per year for a flat of 70 square metres.

The cost of heating with wood pellets will drop by 17 percent to €870 per year, and heating with heating oil will cost 19 percent less and amount to €1,130.

According to co2online, the costs for heating with a heat pump will drop the most – by 20 percent to €1,1105. The reason for this, according to co2online, is a wider range of heat pump electricity tariffs.

Tax hikes in January

Starting January next year, the government will raise the value-added tax on natural gas from seven to nineteen percent.

Alongside this, the CO2 price, applicable when refuelling and heating, will also increase.

According to energy expert Thomas Engelke from the Federal Consumer Association, these increases will mean that a small single-family household with three or four people that heats with gas would then pay about €240 more per year for gas.

“That’s a lot”, he said.

Another additional cost factor to consider is that network operators also want to raise prices. However, the federal government plans to allocate €5.5 billion to cushion this increase for consumers as much as possible, so how such cost increases will ultimately affect consumers is currently hard to estimate.

Overall, it can be said that, from January, consumers will have to brace themselves for higher energy costs, even though massive increases are currently not expected.

Consumer advocate Engelke advised customers to closely examine where potential savings could be made this upcoming winter: “Those who are now signing a new gas or electricity contract should inform themselves and possibly switch. Currently, you can save a few hundred euros. It’s worth it. On the other hand, you should also try to save as much energy as possible this winter.”