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Switzerland - Overview and introduction 

Taxation of international executives

Swiss income tax legislation is divided between federal and cantonal laws. Federal tax laws apply to the whole of Switzerland, but those of the cantons are only valid within their respective territories. In addition, municipalities and, in certain cases, churches have the jurisdiction to levy taxes. Switzerland has 26 cantons.


An individual’s liability to taxation in Switzerland is based on the concept of residence. An individual resident in Switzerland is taxed on his/her worldwide income.


An individual who moves to Switzerland and takes up employment is subject to Swiss income taxes from his/her date of arrival. However, if a double tax treaty or Swiss internal law provides specifically for taxation by the country of source (such as on income from real estate situated abroad, income from a permanent establishment situated abroad), the exempt income is only taken into consideration for the purposes of determining the applicable tax rate (exemption with progression).


Non-residents are subject to taxation on certain categories of income from Swiss sources.


The multi-layered tax system means that there are no average tax rates. Taxes can only be calculated based on the specific circumstances of an individual based on the applicable cantonal and communal tax laws.


The maximum effective federal income tax rates rise to is 11.5 percent of taxable income. The various cantonal and municipal rates are also levied on a progressive scale, with a maximum combined rate (the highest of which is approximately 44 percent). In addition, social security taxes may be payable.


The official currency of Switzerland is the Swiss Franc (CHF).


Herein, the host country refers to the country to which the employee is assigned. The home country refers to the country where the assignee lives when he/she is not on assignment.

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© 2013 KPMG Holding AG/SA, a Swiss corporation, is a subsidiary of KPMG Europe LLP and a member of the KPMG network of independent firms affiliated with ational Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

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Taxation of international executives