This article covers some of the basics of Swiss Taxes. Everyone has different circumstances, including living in different areas, so please make sure to get the correct information and seek expert advice to help you file your taxes correctly. The focus here is on some basics for those residents and/or working in Switzerland. Taxation can be different for those with non-residential status.
Types of taxation
There are 3 main types of tax you will be required to pay on all sources of income. These are Federal, Cantonal and Community taxes (Bundes-, Staats-, Gemeindesteuern). Most of the taxes you pay go to the Canton and Community you live in. How much varies widely depending on where you live. In addition to these 3 mandatory taxes there is Church Tax (Kirchensteuern). If you belong to any of the nationally recognised religions you are expected to pay the relatively small percentage of church tax. If you are not a member of any of these churches you should indicate this on your tax return (in the space provided (Konfession - Keine)) so that you are not charged.
Residency Status and Taxation
Broadly, there are two types of taxpayers and this is linked to your residential status in Switzerland.
Temporary residents: For those not deemed permanent residents, for example, B or L permit holders, taxes are usually deducted at source by the employer (pay as you go) and you may not need to file annual taxes (but there may be advantages to filing to claim deductions if they apply). So unless you need to file an annual return to claim deductions or to adjust underpayments due to additional income or capital gains not taxed as source, you might be able to relax. If the tax withholdings are correct you might need to do nothing else. However, you should take advice and make sure you are aware of all the rules that might apply before you think about ignoring the annual rounds of tax returns that apply mainly but not solely to permanent residents and citizens.
Permanent Residents: People holding C Permits are treated exactly the same aSwiss citizens or those married to Swiss citizens. Taxes are not deducted at source so you will need to set aside money to pay annual taxes. All permanent residents must file annual taxes and comply with the pay in advance system. Residents/Citizens get estimated tax payment (Provisorische Rechnung) notifications with recommended (empfohlen) amounts to pre-pay. (The pre-payment arrangements vary from area to area. Check what applies where you live.) Ensure that you pre-pay enough taxes under this system as interest charges may apply in the case of under-payment. Equally, over-payments are adjusted and you will get a refund, possibly with interest added. Be aware that the pre-payment process consists of two parts, Federal tax (Bundessteur) and Canton & Community taxes (Staats- & Gemeindesteuer), the latter are usually combined.
The pay in advance system works alongside but not in parallel with annual filing. You are expected to pay estimated taxes for the current tax year (Steuerperiode) in advance of the actual filing which happens once the year has ended.
To complete your tax return you must provide documentation of various kinds, such as salary, bank statements, pension documents, statements of unearned income and so on. Salary Certificates (Lohnausweis) and bank interest statements are automatically sent to you in late January or early February.