The subject of the income tax

Income tax in Switzerland can be levied by the Confederation, the cantons, and the municipalities (Art. 128 para. 1 BV). What exactly is taxed—the question of the tax object—is presented in an overview in this blog post.

Object of the Income Tax‍

The basis of income tax are "all recurring and one-time income" (Art. 16 para. 1 DBG) from natural persons. The taxable income (Art. 25 DBG) is taxed. It is calculated by deducting the expenses and general deductions (regulated in Art. 26-33a DBG) from the sum of all taxable income.

As soon as the income results in an increase in economic performance, it is considered to be accrued and is taxed. The taxable income can be divided into four categories:

Not all incomes are subject to income tax. In Art. 24 DBG, the legislator lists conclusively the incomes exempt from income tax. These can be divided into:

From the taxable income, the legally permissible deductions are deducted to obtain the taxable income (Art. 25 DBG). The deductions can be divided into costs of obtaining income, general deductions, and social deductions:

The entire calculation of taxable income can be simplified in a diagram (Art. 25 DBG):

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