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Switzerland: Personal Taxation

Residence and Liability for Taxation

Residence is the relevant criteria in determining whether an individual is or is not subject to Swiss personal income tax. A person is deemed resident in Switzerland if:

  • He is employed in Switzerland (for this a non-national needs a work permit - limited work permits of 90-120 days can be granted and where granted lead to limited taxation);
  • He carries on a business in Switzerland; or
  • He lives in Switzerland for not less 180 days in any one year. If however he remains in the same abode the time required to be a resident for tax purposes drops to 90 days.

With the exception of the 'fiscal deal' method mentioned below, Switzerland does not discriminate between Swiss residents and the foreign employees of "offshore" operations for purposes of personal income tax. In any event the Swiss authorities consider the various types of tax-privileged company as legitimate tax planning structures which are available to national and non-national alike and not as 'offshore' operations in the traditional sense of the word.

Wealthy foreign nationals who wish to make Switzerland their home but do not wish to work in the country may qualify to pay personal income tax under the 'fiscal deal' or 'lump sum assessment' basis which entitles them to pay considerably less tax than a Swiss national with an equivalent income. This is the only discriminatory personal income tax levy that exists in Switzerland.



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