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TAXES

EXPLAINED: What can I deduct from my tax bill in Switzerland?

Switzerland is approaching its tax deadline on March 31st. Taxes are as inevitable as death and each canton does things differently. But here’s how you can try and reduce your tax burden.

Published: 21 July 2021 14:39 CEST
Updated: 9 March 2024 06:14 CET
Pencils and paperwork sits on a desk ahead of tax time
Here are some common tax deductions in Switzerland. Photo: Photo by Nataliya Vaitkevich from Pexels

Each year, those liable to pay tax in Switzerland – i.e. most workers – will need to complete a tax return. 

The deadline for filing individual tax returns falls on March 31st, though some cantons’s due dates — like Vaud and Bern, for instance — have earlier deadlines. The letter you received from your tax office includes the dare by which you should submit your application unless, of course you have already requested an extension.

READ ALSO: How to get an extension on your tax deadline in Switzerland

Due to the complicated nature of tax returns, many internationals will often opt to have their return completed by an accountant or tax professional. 

It is also possible to do it yourself – and has gotten easier in recent years with tax declaration software and online returns. 

For those who have decided to do their own return  here are some common tax deductions you should know about. 

Keep in mind however that there are variations from canton to canton, so check with local authorities. 

The amount you will pay will also depend on whether you are married or not, with married couples – or those in registered partnerships – expected to complete their tax returns together (though efforts to change this system is underway in the parliament). 

These are some deductions may could be eligible for, according to Moneyland consumer platform:

Public transport

If you commute to your job by public transport, you can deduct up to 3,200 francs of ticket costs from your taxable income. If you use your own moped or e-bike (motor speed above 25 km/h) with a yellow license plate, then you can claim a flat 700-franc tax deduction.

Additionally, “you can claim a tax deduction for commuting by car or motorcycle if your home or workplace is located at least one kilometre from public transportation, or if commuting by car results in substantial time savings. The tax deduction is 70 centimes per commuting kilometre for cars, and 40 centimes for motorcycles.”

Health insurance premiums

The deduction for health insurance, supplementary accident insurance and life insurance premiums “is combined with the deduction for interest earned on savings,” according to Moneyland. This deduction is currently limited to 1,800 francs per adult or 3,600 francs per married couple or registered partnership. If you do not contribute to either an occupational pension fund (pillar 2) or the pillar 3a, then higher tax deductions of 2,700 francs (singles) and 5,400 francs (couples) apply. You get an additional 700-franc deduction for each child or other eligible dependent in your care.

Work-related expenses

A deduction equal to 3 percent of your net salary – with a 2,000-franc minimum deduction and a 4,000-franc maximum one – applies to spending on reference material, specialised workplace clothing, necessary equipment (including computers and software), and some other career-related costs.

Lunches

Also related to your employment, “if you work far from where you live, you can deduct the cost of eating out from your taxable income” Moneyland says. “The flat deduction is 15 francs per workday up to a maximum of 3,200 francs per year. If your employer provides discounted meals, the flat deduction is 7.50 francs per workday up to a maximum of 1,600 francs per year.”

Debt

Being in debt is NOT a desirable thing in Switzerland. But in terms if taxes, it is a ‘good’ thing because interest which you pay for loans can be deducted from your taxable income. “Eligible loans include mortgages, personal loans, and credit card loans, among others,” according to Moneyland. “Car leasing payments, on the other hand, are not tax-deductible.”

Childcare

The high cost of childcare in Switzerland can be partially offset by  the tax deduction.The maximum amount is 25,000 francs.

Education

The costs of education above the secondary level are tax deductible, up to a maximum  of 12,700 francs per year.

Retirement savings

Money which you pay into the pillar 3a can be deducted from your taxable income. The maximum amount can change from year to year.

Both compulsory and voluntary contributions to your occupational pension fund (pillar 2) are tax-deductible, as are those those paid into the Old Age and Survivors Insurance (OASI) scheme (pillar 1).

This link lists all the deductions taxpayers in Switzerland are entitled to.

What if you are a freelancer / self-employed?

You too are entitled to some tax deductions, including those related to your business expenses.

You can find more information about this here:

READ MORE: What freelancers in Switzerland need to know about paying tax

As with all of our tax and financial summaries, this is a guide only and should not be taken to constitute specific and tailored financial advice. For tax advice which is personalised to your situation, please contact an accountant or tax specialist. 

Member comments

  1. Please double check the deductibility of medical expenses. My understanding it that they are no capped, on the contrary: they need to be higher than 5% of your income to be deductible.

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For members

MONEY

Do adult children in Switzerland have to support their parents financially?

Usually, it is the parents’ responsibility to ensure their kids are well taken care of financially. But can Swiss authorities force the children to return the favour in times of need?

Published: 30 April 2024 15:31 CEST
Do adult children in Switzerland have to support their parents financially?

In most cases, once children are grown up and out of the house, they are (or at least should be) self-sufficient in terms of finances.

Parents too should breathe a sigh of relief that they are no longer obligated to pay for their children’s expenses, except perhaps for giving them some money here and there as a gift.

This is what happens in the best-case scenario.

But what if things don’t go according to this plan — for instance, if the parents find themselves in financial straits and can’t  afford to pay their bills?

Family obligations

Generally speaking, the truly needy people who don’t have enough income to pay for their basic living expenses will receive financial help from the government, in the very least in the form of the health insurance and housing subsidy.

READ ALSO: Can I get financial help in Switzerland if I’m struggling to pay the bills?

However, before doling out public money, authorities will see whether relatives should be made to help the struggling individuals pay their bills.

(In this context, ‘relatives’ means only those in the direct line of descent: grandparents, parents, and children.)

They will do it by checking the tax status of these relatives — how much they earn and what other financial assets they have — to determine whether, and how much, they should be paying toward their parents’ expenses.

Obviously, you will be expected to pay up only if your own financial situation allows it; you will not be forced to part with your money if you have very little of it yourself.

 ‘Favourable financial circumstaces’

Based on a Federal Court ruling, if the adult child  lives in ‘favourable financial circumstances’ they are required to help out their struggling parents.

The Court defined ‘favourable financial circumstances’ as income and assets allowing a comfortable life.

‘Comfortable life’, in turn, was defined by the Swiss Conference for Social Welfare (SKOS), as a taxable annual income of 120,000 francs for a single person, and 180,000 francs for married couples.

“If you have minors in your household, the limit is increased by 20,000 francs per child,” according to AXA insurance.

It goes on to say that you can deduct an exempt amount from your taxable assets.

“Your annual depletion of assets is deducted from the remaining amount. This means that if you are obligated to provide financial support, you are permitted to use part of your assets yourself each year; you don’t have to devote your entire assets to providing support.”

At between 18 and 30 years of age, this is 1/60th per year; from 31 to 40, 1/50th per year; 41 to 50, 1/40th per year; 51 to 60, 1/30th per year; and from the age of 61,1/20th per year. 

Are there any exemptions to these rules?

Aside from not having sufficient funds, you could be exempted from paying if, say, your parents, or parent, have not lived up to their own financial obligations toward you.

In Switzerland, parents are required to  provide financially for their children until the age of majority, and even beyond that if they are still studying or undergoing vocational training — typically, until the mid-20s.

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