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Stamp Duty / VAT In Switzerland, there are numerous different types of indirect taxes which are levied by different taxing jurisdictions. Stamp duty (on share capital, certain financial transactions and insurances) and VAT are federal taxes which are equally applicable to all Swiss tax payers.


Individual Taxes Individual Income Tax Individual income tax is levied on worldwide income earned by individuals who are Swiss residents with the exception of income from enterprises, permanent establishments or real estate situated outside the country. Non-residents are subject to Swiss income tax on certain specific types of Swiss source income. Federal income tax rates are progressive ranging from 0 per cent to 11.5 per cent. Cantonal and communal tax rates vary depending


on the canton and commune involved. As a rule however, these taxes are generally twice as high as federal rates. Individuals are not subject to capital gains tax realised by individuals on the sale of privately held assets other than on real estate.


Individual Wealth Tax There is no federal wealth tax within the Swiss tax system. All cantons levy a wealth tax on individual tax payers. Tax rates are progressive and range from 0.1 per cent to 1.5 per cent per annum.


Value Added Tax Swiss value added tax is a federal tax which was introduced on 1st January 1995. In January 2011, the value added tax rate increased to 8 per cent calculated on the basis of the price paid for the supply of goods or services. Certain goods and services however are taxed at 2.5 per cent while the supply of accommodation is taxed at a rate of 3.8 per cent.


“Individual income tax is levied on worldwide income earned by individuals who are Swiss residents with the exception of income from enterprises, permanent establishments or real estate situated outside the country.”


Gift and Inheritance Tax There is no federal inheritance or gift tax. Inheritance and gift tax rules are set out in the cantonal rules.


across tax


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Pierre Gritti


Almost all cantons however, grant an exemption to first degree heirs, i.e. between parent and child. In other words, children can inherit or receive gifts from their parents without any tax being levied. As a rule, for all other heirs cantonal inheritance tax


is levied on the total estate of persons who have their last domicile in the canton and for non-resident persons, on real estate situated in the canton of last domicile.


Withholding tax Swiss withholding tax is a federal tax. It is levied on certain types of investment income from Swiss sources as well as on lottery gains and insurance benefits. The tax rate is a flat 35 per cent on investment income. Royalties, management fees and technical assistance fees are not subject to Swiss withholding tax. For Swiss resident beneficiaries, withholding tax is


reimbursed by way of cash refunds (corporate taxpayers) or as a credit against income tax (individual taxpayers). For non-resident beneficiaries, Swiss withholding tax represent a final tax on investment income from Swiss sources. If however the non- resident beneficiary is a resident of a State with which Switzerland has concluded a double treaty, he may be able to claim a partial or total reimbursement of the Swiss withholding tax ➔


fi MONTHLY MARCH 2011


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