Taxation of persons with dual residence

To avoid double taxation for individuals residing in multiple countries, Switzerland concludes international agreements.

2016

If dual residence exists, a person can be subject to unlimited tax liability both in Switzerland and in another state. To avoid double taxation, so-called double taxation agreements (DTAs) are concluded.

Switzerland's DTAs

When two countries tax the same thing at the same time, double taxation occurs. To avoid this and to facilitate cross-border economic traffic, DTAs are concluded. Switzerland has signed 53 DTAs according to international standards, of which 46 are in force. Additionally, Switzerland has 10 Tax Information Exchange Agreements (TIEAs), which solely involve an exchange of information. All agreements can be viewed and downloaded on the page of the Swiss Confederation.

Who is liable for taxation in Switzerland?

Natural persons are subject to taxation in Switzerland due to personal or economic affiliation. Personal affiliation is given if the person has a tax residence in Switzerland or stays in the country with the intention of permanent residence. The condition of a tax residence is established by a presence of at least 30 days with gainful activity or at least 90 days without gainful employment. An exception is made for persons who are only in Switzerland to attend an educational institution or for medical treatment in a sanatorium.

Natural persons with dual residence

If dual residence exists, a person can be subject to unlimited tax liability both in Switzerland and another state. In these cases, most DTAs grant precedence to one contracting state as the state of residence based on certain criteria. For natural persons, it is usually checked where the person has closer personal and economic relations, where they predominantly stay, and what nationality they hold.

For example, a person who is resident in Switzerland and has a permanent residence in Germany or stays in Germany for at least six months per calendar year is subject to unlimited tax liability in both Switzerland and Germany. However, double taxation is resolved by Germany crediting the Swiss taxes.

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