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TAXES

EXPLAINED: Does everyone have to pay Switzerland’s wealth tax?

Despite a widespread belief to the contrary, not everyone in Switzerland is rich. So why does almost everyone have to pay the wealth tax?

EXPLAINED: Does everyone have to pay Switzerland's wealth tax?
The wealthier you are, the more 'wealth' tax you will have to pay. Photo: Pixabay

In a nutshell, the Swiss system is based on three levels of taxation: federal, cantonal, and municipal.

But in addition to this basic structure, residents are liable to pay some other taxes as well.

One of them is a wealth tax and anyone whose is resident in Switzerland for tax purposes is liable to pay it, both Swiss nationals and foreign residents.

As the name suggests, it is a tax levied on all your assets, both in Switzerland and abroad.

It is independent of your income, and is based only on the value of your assets. Market value will be used to determine how much certain assets are worth.

They include your bank accounts and investments, as well as the value of properties or real estate you may own in Switzerland and / or abroad. While your property in the UK or the US won’t be directly taxed in Switzerland it’s value will contribute to how much wealth tax you pay.

Other assets that you must pay this tax on are life insurances, the value of your vehicles, gold bullions, valuable art pieces, stamps, coins, and jewellery.

Basically, almost everything you own is taxable, though from a purely practical point of view, it would be difficult for the authorities to tax these smaller objects if you don’t declare them.

As somewhat of a paradox perhaps, even if your income is low (for instance, if you are retired and live only off your pension), but keep some cash in the bank for a ‘rainy day’, you will still owe the government money.

On the other hand, your furniture, house fixtures, clothing, books, sports equipment, electronics, cats, dogs, and other pets, are safe from the taxman, as are your contributions into the second and third pillars of your pension fund.

Additionally, you can deduct any debts you have from the wealth tax you owe.

What is your wealth tax burden?

As so many other things in Switzerland, the amount you will be charged is determined by your canton.

It is the highest in Geneva (1 percent) and lowest in Nidwalden (0.0665 percent), with other cantons falling somewhere in between.

Mostly, it is calculated on a progressive scale, that is, your tax burden will depend on the exact amount of your assets. The progressive scales vary between cantons and even between municipalities in the same canton.

Each canton has a different exemption limits for wealth tax. That means if the net value of assets is below this limit then no wealth tax has to be paid. 

In Zurich, for example, no wealth tax is levied on assets worth less than 77,000 francs.

Above that amount, you will owe  0.50 francs for each 1,000 francs extra. Starting from 308,000 francs you will owe 1 franc for each 1,000, increasing to 3 francs for each 1,000 francs above 3,158,000.

Is there a (legal) way to reduce wealth taxes?

The most obvious (though not always practical) one is to move from a high-tax region to a more favourable one.

There are also some investment schemes which will help you save on wealth taxes, but you will need professional advice on that.

However, there is no way to avoid this tax altogether — unless you really have no single franc to your name.

Member comments

  1. if you don’t have residency and are just a holiday home owner subject to 90d rule do you still pay . That would be akin to paying to be a full member of a club you were not allowed to attend for 1/2 the year

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TAXES

Switzerland to lower the obligatory TV license fee

Not everything in Switzerland is getting more expensive: the annual radio and television fee is set to become cheaper.

Switzerland to lower the obligatory TV license fee

The current fee (also referred to as ‘tax’) of 335 francs a year per household will drop to 312 francs by 2027, and then to 300 francs from 2029, the Federal Council announced on Wednesday. 

The main goal of this reduction is to alleviate the financial burden that the license fee places on many households and businesses alike.

However, there is another reason for this move as well.

This measure is also a concession of sorts to the “200 francs is enough” initiative launched by some political parties, which want to cut the fee even more significantly than the government does.

This will not be the first time this tax is reduced: it fell from the original 451 to 365 francs in 2019, and to the current 335 in 2021.

What is this fee anyway?

Many foreigners who move to Switzerland are surprised to discover that they are automatically charged a television and radio license fee — even if they don’t own either.

This fee is compulsory for most households, though some can be exempted  from it (see below). The amount of 335 francs is the same for all private homes, regardless of how many people live there or how many TV sets they have.

The invoice is automatically sent out once a year — unless you opt for quarterly billing —by a company called SERAFE, which collects this fee on behalf of the government from private households. The Federal Tax Administration is responsible for collections from businesses.

Where does this money go?

The 1.37 billion francs collected annually is used to fund public broadcasters like the Swiss Broadcasting Corporation and other TV and radio stations across Switzerland.

“In this way, the public service will be guaranteed in all parts of the country and democracy will be strengthened; the entire country and all its inhabitants will benefit”, according to the Federal Office of Communications (OFCOM), which is responsible for the scheme.

This map shows which stations in your area are subsidised by the government:

Image by OFCOM

Who is exempted from paying this fee?

Several categories of households are not subject to this tax:

  • Households with persons who receive supplementary Old Age, Survivors’ and Invalidity insurance benefits from the federal government
  • Households with no means of receiving radio, and have no computer, no tablet, no smartphone, and no car radio (admittedly a very limited number of people)
  • Households of deaf-blind people, provided that there are no people liable for the fee living in the same household
  • Households of diplomats
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