Relocating to Switzerland - Part VI HOW TO SAVE TAXES

TAXES IN SWITZERLAND

 

Relocating to Switzerland – Part IV: Taxes in Switzerland

Why the choice of your municipality MATTERS 

Once, you have decided to relocate to Switzerland for business reasons, many expats do not pay enough attention on choosing accomodation for living in a city or village with a lower tax rate. It is understandable that, in fact,  the choice of the apartment should mostly be located in a geographically advantageous location next to the workplace. But wouldn't it make sense to first calculate how much of your income is getting "lost" through taxes? In this blog we want to give examples of how important the choice of municipality may be for the different tax rates.

 

In Switzerland, there are two diffrent types of taxes. On the one hand we have the federal tax which remains the same for the whole nation. On the other hand, we have the canton & municipality tax, which may differ. 

 

Example 1 (Zurich City)

Based on an income of CHF 120’000 net salary per annum and CHF 95’000 tax based salary, as a single person without church tax, you pay in Zurich CHF 5'845.00 for the Canton tax, which is equal to 100% (6.153 % from CHF 95’000). The city of Zurich has a tax rate of 119% which means, we add another CHF 6'955.55 for Zurich plus the “Personalsteuer” of CHF 24  which is in total CHF 12’824.55. In addition we add the federal tax which is CHF 2'544.-. All in all you end up with taxes of CHF 15’368.55 per year.

 

Example 2 (Kilchberg)

Contrary to Zurich (119%) the municipality rate is lower (72 %). Instead of CHF 6955.55 you “only” have to pay CHF 4'208.40 taxes for Kilchberg. In total you end up with taxes of CHF 12’621.40. You would save CHF 2747.15 on taxes.

Funfact:

In this example your flat could be CHF 228.90 more expensive in Kilchberg than in Zurich. So for example if you find a flat with an equal price in Kilchberg, you could safe the whole difference! That's a lot of money.

 

Example 3 (Wollerau, Canton Schwyz)

The equal share of 100% in Canton Schwyz amounts to CHF 3,128 for the same income. Calculated to 170% you end up with CHF 5'319 for the canton and 75% for municipality Wollerau which is CHF 2'347. Without the federal tax, you will pay CHF 7666 and plus CHF 2544 federal tax you end up with a total taxation of CHF 10’210.

 

Summary

  • In Zurich City you would pay a total of CHF 15'369.
  • In the canton of Zurich in Kilchberg you would pay CHF 12'621.
  • In Canton Schwyz in Wollerau you would pay CHF 10'210.

The earlier you calculate your taxation, the faster you can actively save money or spend it for whatever you wish for. Always remember that the higher your income, the greater the difference. Avoid hasty relocation plans without worrying about the tax issue. Perhaps it is "only" CHF 1,000 calculated for the whole year, but calculated for 10 years it means CHF 10,000, which you could have reinvested differently. 

Kantone der Schweiz.svg

 


Obrist 

This blog article is a cooperation with Doman O. Obrist.

Doman O. Obrist is an independent insurance broker, helping his clients making the right choice with their insurance. He is specialized in International Local Hires. He is fluent in German and English.

For more information and free consultation services please visit: https://www.obrist-helps.ch

Obrist Helps Consulting GmbH
Seestrasse 42
CH-8802 Kilchberg 
+41 (0)44 772 14 44
www.obrist-helps.ch
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