tax glossary

The AHV, or 1st pillar of pension provision, is compulsory for everyone. Payments are made as a percentage of wages, which are not subject to tax.

Alimony is a contribution to support the children of separated or divorced spouses.

The AIA allows account data to be exchanged between participating countries in order to prevent tax evasion.

The Federal Customs Administration charges 4% tax on newly registered cars. Cars owned by private individuals or companies are taxed as assets at their current value.

All costs associated with the exercise of a profession are considered professional expenses.

Applies to people residing abroad who work in Switzerland. They are subject to withholding tax.

The federal tax in Switzerland is levied on the income of natural persons (private individuals) and the profits of legal persons (companies). Assets are not taxed.

Tax on income levied by the federal government in Switzerland.

A company's profit distribution to the owners, distributed across the shares. Withholding taxes are due on dividends (35% in Switzerland), which can be reclaimed via a tax return.

The double-earner deduction or two-earner deduction can be claimed if both spouses are employed.

For self-used real estate or land, additional income is declared and taxed, which is estimated based on the market rental or lease income.

Formal declaration, submitted in writing to the tax office, that an assessment order or assessment decision is incorrect.

Heirs declare inheritances received or not yet distributed in their tax returns and pay inheritance taxes based on their degree of relationship to the testator.

In the discretionary assessment, income, assets and deductions are estimated by the tax administration to the best of its knowledge.

Taxable profit from self-employment.

Exchange-traded funds with continuous trading on a stock exchange. Therefore, there are no issue premiums.

For children in compulsory school age, childcare costs can be deducted from income. These are costs incurred for looking after your child while you work.

The deadline for submitting the tax return.

With present assessment, the tax is levied on the income and assets earned during the tax period.

In Switzerland, the cantons authorize the municipalities to levy taxes. They are defined as a factor in the state tax (tax rate). Examples: Zurich municipalities, Aargau municipalities.

Profit from corporations (GmbH, AG) that is distributed to the owners. Depending on your personal tax situation, the ratio of wage payments to profit distribution can lead to tax optimization.

tax rate, additional income is also taxed on the progression scale.

The property capital gains tax (GGSt) is payable on the profit from the sale of a property or piece of land. It decreases with longer ownership and can be progressive. The calculation can be very complex. There are many deductions and under certain conditions the GGSt can be deferred completely.

The main tax domicile of a natural person is their place of residence. If there are multiple places of residence, the center of life applies.

Mortgages, i.e. debts with real estate as collateral, are increasingly being granted on mortgage exchanges.

A real estate agent takes care of the marketing and sale of a property. Financing and tax planning should be completed before the sales process.

Indirect taxes are linked to goods or services and are included in their prices or shown additionally.

If wages are increased due to inflation, the taxpayer can move up to a higher rate. This means that inflation is not fully compensated, which is why bracket creep is adjusted in the income tax rates.

A reduced, progressive tax rate applies to capital payments from pension plans. Splitting is also worthwhile here. Example: When withdrawing from a pension fund in the city of Zurich, the tax rate is 8.24% for the federal government, canton and municipality. If withdrawn in 3 tranches, the tax rate is reduced by 2.14%, so the tax amount is around CHF 21.

Taxes on capital benefits are subject to a reduced rate in the Swiss cantons and are progressive.

Parents are entitled to a child allowance for the living expenses of minors or children in training. This is a flat-rate allowance.

A fixed head tax (personal tax) must be paid by every person in Switzerland once they reach the age of majority.

Cryptocurrencies are digital currencies. They must be declared as assets in the securities register. Capital gains from cryptocurrencies are tax-free.

A lottery tax is levied on winnings from lotteries, games of chance, games of skill or online casinos.

VAT is levied on consumption or services and passed on to the final consumer. It is collected by companies or self-employed persons and paid to the federal government. 

Persons subject to withholding tax with an income of more than CHF 120 can make a subsequent assessment.

An additional secondary tax domicile can arise due to rental income or due to a business operation within the self-employment.

For the tax return, the net wage counts as income from employment. It is calculated as gross wages minus the sum of all social benefits (AHV, ALV, EO, pension fund, PK purchase).

The online tax return has become the norm today. It is immediately available to the user and does not need to be maintained.

The pension fund or 2nd pillar is the mandatory occupational pension scheme. Regular contributions as well as extraordinary purchases can be deducted from taxes.

Partnerships are formed by two or more natural persons (general partnerships or simple partnerships). In this case, the individual partners are always liable to pay tax on their respective share of profits and assets.

For cross-border commuters, the tax is deducted from the salary by the employer. These people do not have to fill out a tax return unless there is a subsequent assessment or additional assessment of withholding tax.

The movable assets and real estate less all debts and mortgages.

The 3rd pillar allows you to make voluntary provisions. Pillar 3a contributions are tax deductible up to a maximum limit. In addition, payments can be made retroactively from 2025.

Gift tax affects the recipient of the gift. Gifts to spouses, registered partners or descendants usually result in lower taxes or are completely exempt. The tax return

Interest on private debts can be deducted in the tax return for the respective tax year.

Voluntary contributions to charitable organizations can be deducted from income taxes.

In Switzerland, the cantons levy taxes on income and wealth.

Service and support with specialist knowledge in optimizing taxes. In most cases, the administration is also handled, i.e. the tax returns are filled out, discussed and submitted.

Declaration of the economic situation of persons or companies on the basis of which the tax office makes an assessment and calculation.

The tax rate is used to calculate municipal taxes. The municipal assembly determines this factor.

Tax sovereignty regulates the powers of states to levy taxes. In Switzerland, Article 3 of the Federal Constitution applies.

Taxation of self-employed activities is carried out by the owners or shareholders.

Investments with the aim of optimising the return after tax. This is done through

All legal options to reduce taxes. This means deductions and optimized distribution of income.

The period for taxation. This is generally the calendar year. An exception is made if a tax return is filed during the year due to moving from abroad, moving abroad or death.

An area of ​​general financial planning that optimally distributes the tax burden.

The disproportionate increase in the tax rate for higher taxable incomes.

Harmonization of taxes for companies and self-employed persons from 2020. The tax reform includes important deductions for patents, research and development.

The tax rate for the federal government and cantons depends on the level of income and assets.

Affected persons or companies who have to pay taxes.

With the penalty-free voluntary disclosure, taxpayers have the opportunity to disclose previously undeclared income or assets. Under certain conditions, this has no criminal consequences and is not considered tax evasion.

Immovable property includes real estate and land.

If you move to Switzerland, move away or die, you must submit a tax return during the year.

If you provide financial support to a person who is unable to work and in need of support, you can deduct the support from your tax return.

The assessment procedure determines taxable income and assets.

In the assessment order, the taxes are definitively determined based on the tax return submitted.

The withholding tax of 35% (in Switzerland) and 15%-30% abroad is paid by the banks as withholding tax directly to the Federal Tax Administration (SFTA).

Health insurance premiums, accident insurance premiums or life and pension insurance premiums can be deducted from taxes.

Interest that the taxpayer must pay if he or she does not pay the tax bill by the specified deadline.

Weekly residents are taxed at their place of residence or work.