Tax information when emigrating from Switzerland: what you need to know

If you move abroad, you will have what is known in Switzerland as "sub-annual tax liability". KEYSTONE/Peter Klaunzer

Tax liability in Switzerland does not always end at the country's border – here’s what you should bear in mind when moving abroad.

If you are moving to another country, does that mean no more tax liability in Switzerland? It might work – but it’s not that simple.

In our Guide to Moving Abroad you will find further tips for emigrating from Switzerland and the life abroad.

Where do the Swiss Abroad pay taxes?

Swiss emigrants who live and work abroad or draw an old-age and survivor insurance pension (OASI – known as AHV/AVS) generally pay taxes in their place of residence, not in Switzerland.

There are exceptions for diplomatic staff, digital nomads, employees of international organisations and transport companies, and employees of companies based in Switzerland who are on foreign assignments. Others who continue to receive income from Switzerland may also still have to pay taxes on income earned within the country, known as limited tax liability.

Tax liability in the year you move abroad

If you move away during the course of the year, you will have what is known in Switzerland as “sub-annual tax liability”.

In this case, your income taxes are calculated from the actual income you earned between January 1 and the date on which you officially registered your change of residence. The assessment of taxable assets is based on their value at the end of your tax liability period in Switzerland.

You should submit your completed tax return for the current year well in advance of your departure so that the tax office in your municipality of residence can calculate the taxes which will be due.

“We recommend contacting the tax office at least 30 days before your departure date and also consulting the information on the website of your municipality in advance,” says Urs Neuenschwander, communications officer at Zurich cantonal department of finance.

How to pay your taxes after you move away from Switzerland?

It is important to designate a representative who resides in Switzerland or set up a mailing address before leaving the country, depending on the requirements of the respective tax authority. In certain cantons, all taxes due, including provisional payments, must be paid before emigrating.

In other cases, you can pay the tax bill from your new place of residence abroad, for example in canton Bern, “the tax administration sends your statement to the specified delivery address, and then further along in the process, they send the tax bill there too,” says Dominik Rothenbühler, media spokesperson for the Bern cantonal tax administration.

What are the risks of unresolved taxes before emigration?

If you run away to another country without paying your bill or the invoice cannot be delivered, the debt remains outstanding and you can expect reminders, and fines, and could be issued a debt collection notice. If you have known assets in Switzerland, the tax authorities can seize them. If you try to enter back into the country, the outstanding tax will be demanded upon entry.

When are you still liable for taxes in Switzerland?

Tax liability does not always end at the border. If you continue to receive certain income from or own property in Switzerland, you are still subject to tax liability in Switzerland. This may be the case if you receive income from real estate or securities, draw a pension or receive capital benefits from the second or third-pillar pension plans, or if you occasionally do self-employed work in Switzerland.

Switzerland’s double taxation agreementsExternal link are and important topic. These agreements determine which country can levy taxes on which income. Switzerland has such bilateral agreements with over 100 countries – including all EU and EFTA countries. As a rule, these protect you from double taxation.

Drawing a pension or receiving capital benefits from pension plans and earning dividends and interest from bonds are often taxed directly at the source. This means that tax is automatically deducted from your income. Depending on the double taxation agreement, you can apply for a refund of the withholding tax.

How to complete your tax return

If you own property in Switzerland or continue to earn private income which is connected to a fixed place of business in the country, you must submit a Swiss tax return. In this case, the following points should be noted:

• You must declare all worldwide income, assets and property in your Swiss tax return. This includes, for example, a house in your newly adopted country. Although this is not taxed in Switzerland, worldwide income and assets affect which income tax band you’re in.

• If you do not rent out your property in Switzerland, depending on the estimated rental value, it may be worthwhile to submit a simplified tax return and be taxed at the maximum rates. “If you own a small farmhouse in canton Ticino, the taxes you end up paying could be a few hundred francs more. However, you would save the cost of an advisor and a lot of time,” an expert on cross-border tax issues told SWI Swissinfo.ch.

• If the estimated rental value is high or if you continue to spend a lot of time in Switzerland, it is advisable to consult an expert. In these cases, you could be assessed as having so-called, “unlimited tax liability”, and be obligated to pay taxes on all your income worldwide. The 183-day ruleExternal link is key here. “It is important that you keep track of the days you spend in Switzerland and can prove this in case of doubt,” says the tax expert.

Further information on this topic can be found on the website of the Federal Tax AdministrationExternal link and the State Secretariat for International FinancialExternal link.

Edited by Balz Rigendinger
Adapted from German by David Kaufher/amva