artax logo white
limited tax liability
Table of Contents

When does unlimited and when does limited tax liability apply in Switzerland? Natural persons are subject to unlimited tax liability in Switzerland if they have their tax residence here. Diplomats abroad are also subject to unlimited tax liability if they are exempt from tax abroad. 

Table of Contents

Limited tax liability

A limited tax liability applies to natural persons with Swiss income without a tax residence or stay in Switzerland, due to their economic affiliation in Switzerland:

  • receive earned income, unless they are cross-border commuters;
  • are owners, partners or beneficiaries of business operations;
  • as members of the administration or management of legal entities;
  • maintain business premises;
  • have ownership, real or economically equivalent personal rights of use to real estate; work in Switzerland;
  • are creditors or beneficiaries of claims that are secured by a mortgage or pledge on real estate in Switzerland;
  • receive pensions, pensions or other benefits that are paid by an employer or a pension institution based in Switzerland on the basis of a previous employment relationship under public law;
  • Receive benefits from Swiss private law occupational pension institutions or from recognized forms of tied personal pension provision.

Income tax - profit tax - withholding tax

A limited tax liability means: The federal government levies, as a direct federal tax, an income tax on natural persons, a profit tax on legal persons and withholding tax on the income of certain natural and legal persons. In addition, there are cantonal and municipal taxes. Switzerland's tax system results in enormous tax competition and, as a result, a very different tax burden. The cantons and municipalities differ in their tax rates, but also in the calculation of taxable income.

In international situations, however, the right to taxation is restricted by double taxation agreements (DTA). This agreement stipulates, among other things, that in the case of multiple residence, the center of vital interests determines the residence and thus the basic taxation. The DTA regulates individually for each type of income which country may exercise the right to tax.

Jürgen Bächle
Jurgen Bachle

has been working as an independent tax consultant and expert in international tax law since 1989 and has been a member of the board of the German Association of Tax Consultants Baden-Württemberg, DSTVBW, for over 20 years.

Start a conversation
Social
Facebook f Twitter Youtube Xing
Vimeo

By downloading the video you accept the privacy policy of Vimeo.
Read more

Load video

International tax advice

artax advises internationally active medium-sized companies and private individuals on an interdisciplinary basis in all matters of German and international tax law and related areas as well as in corporate strategy and location issues.

Start a conversation
Subject-specific expert knowledge

Convince yourself of our expertise in the area of ​​national and international tax law, find out more about current case law and cross-border commuter issues and benefit from our in-depth specialist knowledge in creating individual tax strategies. Your tax law knowledge database – artax

Get in touch!

Regardless of whether you are planning to move to a new country or want to take your company internationally, our team at artax is always available to provide you with knowledge and expertise.

Tax law firm for international tax law – national, international & remote
Locations
Contact
artax logo white
Your digital tax office
Facebook f Twitter Youtube Instagram