The Swiss tax system

The Swiss tax system has developed over time through various influences and has a strong emphasis on the federalist state structure.

The Swiss Tax System

The Swiss tax system has certain peculiarities that need to be considered. Not only the federal government but also each of the 26 cantons levy taxes. Finally, the municipalities must also be mentioned as they too collect taxes. Thus, taxes are levied at all three levels of the state structure in Switzerland. The competence to levy taxes primarily arises from the Federal Constitution of the Swiss Confederation (BV). Due to the principle of federalism, this results in the federal government only being allowed to levy taxes if it has been granted competence by the Federal Constitution. The cantons, on the other hand, are generally free in the design of their taxes, unless the BV provides for a different regulation by express provisions. A special position is taken by the municipalities, which can only levy taxes within their competencies. These competencies arise from cantonal legislation. With the aim of standardization, the Tax Harmonization Law (StHG) was created. This law aims to achieve at least partial standardization of taxes.

The Swiss tax system follows several principles: such as the principle of equality before the law, economic freedom, property guarantee, freedom of faith and conscience, taxation according to economic capacity, or the prohibition of inter-cantonal double taxation.

Different Types of Taxes

The taxes levied in Switzerland can be categorized into different types. There are taxes on the income and wealth of natural persons. For legal entities, capital and profits are taxed. Additionally, there are consumption taxes and possession and expenditure taxes. In total, direct taxes account for 70% while indirect taxes only account for 30%. The share of indirect taxes is relatively low compared to other countries.