Information on taxation
Withholding tax on salaries
Employees with no Swiss citizenship and with no (long term residency) C permit are subject to tax withholding on their salaries. Tax withholding also applies to employees not resident of Switzerland. Tax withholding and remittance is an employer obligation.
Swiss resident Employees subject to tax withholding with high employment income, wealth and/or income from wealth also have to file a tax return.
Depending on the canton and personal circumstances employees subject to taxation at source can apply for a source tax reduction.
Swiss tax return filing obligation
Individuals resident of Switzerland have to file an annual Swiss tax return reporting worldwide income and wealth.
For individuals subject to taxation at source there are for practicability reasons (low income and wealth) exceptions from a Swiss tax return filing obligation.
In some cantons further exceptions apply for Individuals with huge fortune and with no gainful activities in Switzerland in case of a lump sum taxation.
Individuals not resident of Switzerland who own a property in Switzerland also have to file a Swiss tax return reporting worldwide income and wealth (for the tax rate determination). There are also other special cases.
In absence of an extension request, Swiss tax returns have to be filed by March 31 of the following year. Depending on the Canton, there are different rules for extension deadlines and charges.
Tax assessment
On the basis of the filed tax return, the tax authorities assess the taxable income, the taxable wealth and the tax rate - both for cantonal and communal as well as for the federal tax.
Final tax bills
With the tax assessment notice the tax authorities also issue the final tax bills. The remainding tax liability (after deduction of advance payments, withholding taxes from salaries and interest/dividends) is payable within 30 days. Some cantons charge interest for late payments on a balance underpaid.
Advance payments
Individuals not subject to taxation at source in general have to pay provisional taxes already before they receive their tax return forms to complete and submit. The payment of provisional taxes is in some cantons volutary whereas in other cantons, the tax authorities can even bring provisional tax bills to a forced execution.
The withholding tax is taken into account as an advance payment.
Unfortunately, credit interest on advance payments have been reduced in most cantons.