Prohibition of intercantonal double taxation – Part 2: How does it work?

In Switzerland, tax sovereignty, i.e. the right to levy and collect taxes, is vested in the federal government and each canton. However, each tax base may only be taxed by one canton. This is referred to as the prohibition of inter-cantonal double taxation. The first article explained what this is and which taxes are covered by it. This second article explains how it works.

Significance of tax domiciles

‍In order to avoid double taxation, it is necessary to know where the respective income is taxable. The main tax domicile of a natural person is at their place of residence if they reside there with the intention of remaining there permanently (Art. 3 para. 2 StHG). For legal entities, the main tax domicile is at the registered office (Art. 20 para. 1 StHG). This is where income from employment, for example, is taxable. In addition, there are three secondary tax domiciles: