Taxation of international executives
Are there social security/social insurance taxes in Switzerland? If so, what are the rates for employers and employees?
|Type of insurance||Paid by employer||Paid by employee||Total|
|Old age and disability 1)||5.125%||5.125%||10.25%|
|Unemployment insurance I 2)||1.10%||1.10%||2.20%|
|Unemployment insurance II 2)||0.50%||0.50%||1.00%|
Additionally for Canton of Geneva only
|Type of Insurance||Paid by employer||Paid by employee||Total|
Resident individuals and individuals having a gainful activity in Switzerland are required to contribute to the mandatory old age and disability insurance scheme. Employers must also contribute. The contribution is 10.25 percent of total remuneration (unlimited) of which 5.125 percent is charged to the employee and 5.125 percent to the employer.
Individuals having a gainful activity in Switzerland are also subject to mandatory unemployment insurance. The contributions (employee and employee each pay half of the total) are 2.2 percent of remuneration up to an annual salary of CHF148,200. A solidarity surcharge of 1.0 percent (split evenly between the employee and the employer) is also due on income over CHF148,200 uncapped.
Switzerland has concluded social security treaties with more than 30 countries/territories. Providing certain conditions are met, exemption is available for a certain period from the Swiss social security system if an employee continues to contribute to their home social security system. Please note that special regulations apply to individuals from countries/territories from the European Union.
Private retirement and disability pensions are compulsory for most employees subject to the Federal Old Age and Disability Insurance for annual earnings between CHF21,330 and CHF85,320. The employer’s contributions must be at least equal to those of the employee. Rates vary according to age. Most pension plans give additional pension cover in excess of these minimum requirements.
Contributions to foreign pension plans may be deductible provided the plan is considered to meet the same requirements as a Swiss pension scheme (such as insured risks, insured population, benefits, and so on).
Are there any gift, wealth, estate, and/or inheritance taxes in Switzerland?
All cantons, but not the federation, levy a wealth tax on their residents, which is generally imposed on the worldwide net worth of the taxpayer, excluding the value of foreign real estate and foreign permanent establishments. Excluded assets are, however, taken into consideration in determining the tax rates, which are progressive (annually 0.1 percent to 1 percent of taxable net worth). Some cantons exempt taxpayers whose wealth is below a certain level.
All debts are deductible and are allocated to the assets pro rata to their values irrespective of how the asset is financed.
There is no federal inheritance or gift tax. However, most cantons impose such taxes on their residents or on real estate located in their jurisdiction. In general, cantonal inheritance tax is levied on all inheritances and is based on the total net estate. The rate depends upon the relationship between the heirs and the deceased person. All cantons exempt spouses from inheritance and/or gift tax and most cantons also exempt dependents from inheritance and/or gift taxes or levy very low taxes for children between 0 percent and 3.5 percent. The maximum tax burden amounts to up to 49.5 percent of the estate in the case of inheritance to an unrelated third person. The last canton of residence of the deceased person or donor has the right to tax the beneficiary irrespective of the beneficiary’s residence, subject to any relevant tax treaty. The canton has the right to levy inheritance tax on all persons whose last place of residence was in that canton or who held immovable property located in that canton at the date of death.
Gift tax is generally levied in a similar manner to inheritance tax with the exception of the canton of Lucerne that does not generally levy a gift tax.
The canton of Schwyz and Obwalden (as per 1.1.2017) does neither levy an inheritance nor a gift tax.
Are there real estate taxes in Switzerland?
Many, but not all Swiss cantons, levy a real estate tax on real estate in their jurisdiction and there are different systems of real estate taxation existing in each cantons.
Switzerland does not tax gains made on the disposal of investment or personal assets with the exception of the taxation on profits resulting from the sale of real estate in Switzerland.
The rules and rates for capital gains on the disposal of real estate vary from canton to canton and depend on how long the property was held.
Are there sales and/or value-added taxes in Switzerland?
Switzerland levies value-added tax at a standard rate of 7.7 percent. Certain products are exempt from this tax (such as, healthcare, social security, insurance, and export of goods); others are taxed at a reduced rate of 2.5 percent.
Finally, any overnight stays at a hotel and other accommodations will be taxed at a rate of 3.7 percent.
Are there unemployment taxes in Switzerland?
In Switzerland there is no unemployment tax. Employees are protected by an unemployment insurance system, to which they contribute equally with their employer (1.1 percent each subject to a salary cap of CHF148,200, 0.5 percent each on salary over CHF148,200).
Are there additional taxes in Switzerland that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.
For the recognized churches in the respective cantons (most often Swiss Protestant Church, Roman Catholic, and Christian Catholic churches) a church tax is levied by most of the cantons.
There are no further income taxes on a local level applied on individuals but some cantons or communes still levy a small personal tax, a firefighters’ tax and luxury taxes like dog taxes.
There is a stamp duty on security transactions, transfer taxes amounting to 0.3 percent on foreign securities and 0.15 percent on Swiss securities.
Is there a requirement to declare/report offshore assets (e.g., foreign financial accounts, securities) to the country/territory’s fiscal or banking authorities?
All Swiss residents and non-residents that have the obligation to file a Swiss tax return have to disclose all of their worldwide assets and income in the index of assets and securities of the tax return towards the Swiss tax authorities.
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