Taxes For Members

Does your nationality determine how much taxes you will pay in Switzerland?

Helena Bachmann
Helena Bachmann - [email protected]
Does your nationality determine how much taxes you will pay in Switzerland?
The amount of taxes you pay doesn't depend on your nationality. Photo by Claudio Schwarz on Unsplash

If you are a foreigner in Switzerland, you'll be aware that perks you're entitled to (or not) can depend on your nationality. But what about your taxes?


Generally speaking, citizens of EU / EFTA countries have a much ‘higher’ status in Switzerland in terms of access to the labour market and other perks that nationals of third states (non-EU / EFTA) do not get.

But is the amount of taxes you pay based on your nationality as well?

When it comes to taxation, it makes no difference whether a person is a citizen of an EU / EFTA or non-EU / EFTA country.

What matters is their residence status.

This is what you should know

Taxation of Switzerland's residents can be roughly divided into two categories.

The first one is individual taxation, which applies to residents who are Swiss citizens and their spouses; permanent residents (C permit holders) and their spouses; and temporary residents (B permit).

For all these people, taxes are based on their income, but also on whether they own any 'wealth'.

As the name suggests, it is a tax levied on all your global assets.

They include your bank accounts and investments, as well as the value of properties or real estate you may own in Switzerland and abroad.

Basically, everything you own is taxable.

The amount of wealth tax levied varies from one canton to another. It is the highest in Geneva (1 percent) and lowest in Nidwalden (0.0665 percent).

If you belong to this particular category, your social security contributions are deducted monthly from your wages — regardless of your nationality. But for everything else, you are taxed once a year, and must pay whatever your owe by March 31st the following year.

READ ALSO: Five essential things to know about Swiss taxes before deadline day


What about the second type of taxation?

The so-called withholding tax — is quite different.

Cross-border workers and temporary residents are subjected to this type of taxation — that is, their taxes are deducted each month directly from their salaries by their employer and passed on to tax authorities. Some of this money remains in canton in which they work, and part is handed to their home countries.

The vast majority of foreign nationals working in Switzerland, belong to one of these two groups.

But there is another, though less common, ‘tax category’ as well.

Chances are you have never heard about the so-called ‘AnobAG’ category and, unless you are part of it, neither have most of Switzerland’s residents, apart from tax experts.

This acronym stands for "Employee without a contributory employer.”


What exactly does this mean?

It refers to people working for a foreign company based in a country with which Switzerland doesn’t have an agreement governing mandatory social security contributions.

All of the EU / EFTA countries have such bilateral agreements with Switzerland, as do some third states — for example, the United States.

But if no such agreement exists, the employee must pay out of their own pocket the part that the employer would usually pays.

In many such cases, the employee will negotiate with the company to compensate for this out-of-pocket payment with a higher salary, so that the worker doesn’t suffer any financial disadvantages.

READ ALSO: Immigrants make positive contributions to Swiss social system



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