Moving to Switzerland: what changes from a tax perspective
Moving to Switzerland brings a radical change in how your income is taxed. Unlike many European countries, Switzerland has a three-tier tax system — federal, cantonal, and municipal — with significant differences between cantons. The tax burden can vary by up to 40% depending on your place of domicile.
For those arriving from abroad, the first questions are often the same: when do I have to start paying taxes? Will I be taxed at source or do I need to file a tax return? Are the earnings I received in my home country also taxed here? This guide answers all these questions in a practical and structured way.
Whether you are an employee transferred by your company, a skilled worker with a B permit, or an international professional who has chosen Switzerland as your new base, here you will find all the essential tax information for your first year — and beyond.
Tax residence and domicile in Switzerland
The first fundamental concept is the distinction between tax domicile and tax residence. Swiss law (LIFD Art. 3) provides two alternative criteria for determining unlimited tax liability:
Tax domicile (Steuerdomizil)
You have a tax domicile in Switzerland when you settle with the intention of residing permanently. It is the place where you have the centre of your vital interests — where you live, where your family is, where you conduct your social life. Swiss citizenship is not required: a residence permit and the intention to stay are sufficient.
Tax residence (Steuerrechtlicher Aufenthalt)
You have a tax residence when you stay in Switzerland for at least 30 days while carrying out gainful employment, or for at least 90 days without gainful employment. In these cases, even without a formal domicile, you are subject to Swiss taxes.
How tax domicile is determined
- Registration with the residents' registration office of your municipality (Einwohnerkontrolle / contrôle des habitants)
- Signing a rental agreement or purchasing a property as your primary residence
- Transfer of the centre of vital interests: family, social life, main activity
- Obtaining a residence permit (B, C, L) attesting to your residence in Switzerland
Note: tax domicile does not necessarily coincide with the place of work. A cross-border commuter who works in Zurich but lives in Italy has their tax domicile in Italy. An expat who works and lives in Zurich has their tax domicile in Zurich.
The first tax year in Switzerland
The first tax year as a new resident has some important particularities. Tax liability in Switzerland begins from the day of arrival — not from the beginning of the calendar year.
Date of start of tax liability
Your tax obligation begins from the day you register with the residents' registration office in your municipality, or from the day you start working in Switzerland with a valid permit. From that moment, all income earned in Switzerland is subject to tax.
Pro rata temporis taxation
In the first year, taxable income is projected on an annual basis to determine the applicable tax rate (annualisation), but tax is calculated only on the income actually earned during the period of residence in Switzerland.
Income earned before arrival
Income earned in your home country before the move is not subject to Swiss tax. However, worldwide assets held on 31 December may be relevant for determining wealth tax and the applicable rate (progression reservation).
Practical example
Laura moves from Italy to Lausanne on 1 September 2026 with an annual salary of CHF 120,000. In the first year she earns 4 months of Swiss salary (CHF 40,000). The rate is calculated on CHF 120,000 (annualised basis), but tax applies only to the CHF 40,000 actually earned.
Withholding tax vs. ordinary assessment
One of the most common questions for new foreign residents: withholding tax (Quellensteuer) or ordinary assessment (ordentliche Veranlagung)? The answer depends on the residence permit and gross annual income.
| Criterion | Withholding tax | Ordinary assessment |
|---|---|---|
| Who is subject | Holders of B (and L) permits without Swiss nationality or C permit | Swiss citizens, C permit holders, and B permit holders with gross income > CHF 120,000 |
| Method of collection | The employer withholds tax directly from the salary each month | The taxpayer files an annual tax return and pays the tax by invoice |
| Deductions | Flat-rate — included in the tariff schedule. Limited personalised deductions | Actual — the taxpayer can deduct all documented expenses (3a, commuting, training, etc.) |
| Flexibility | Low — simplified system, does not allow optimisations | High — allows tax planning and access to all deductions |
| Correction | A correction (TOU) can be requested by 31 March of the following year | The tax return is the standard process; any errors are corrected through objection or amendment |
When you switch from withholding tax to ordinary assessment
Gross income > CHF 120,000
B permit holders with gross income exceeding CHF 120,000 are mandatorily subject to ordinary assessment (TOU). The employer continues to withhold tax at source, but the amount is reconciled with the tax return.
Obtaining a C permit
With a C permit, you automatically switch to ordinary assessment from the following tax year. The C permit is usually obtained after 5 or 10 years of residence.
Marriage to a Swiss citizen or C permit holder
If you marry a Swiss citizen or a C permit holder, you switch to joint ordinary assessment from the year of marriage.
Purchasing property in Switzerland
Those who purchase property in Switzerland are generally subject to ordinary assessment for real estate income, with a possible switch to full ordinary assessment.
Voluntary TOU request
It is possible to request TOU by 31 March of the following year. It may be advantageous if actual deductions exceed the flat-rate deductions in the tariff schedule.
Note: the TOU request is irrevocable in many cantons. Once chosen, it applies for all subsequent years until a change of domicile or permit.
Double taxation and DTA conventions
Switzerland has signed over 100 double taxation agreements (DTAs) that determine which state has the right to tax each type of income.
Residence principle
The state of residence has the right to tax the taxpayer's worldwide income. DTAs provide for exceptions and tax credits to avoid double taxation.
Tax credit for foreign taxes
If income is taxed in the country of origin, the DTA provides a tax credit: the foreign tax is deducted from the Swiss tax on the same income.
Progression reservation
Foreign income exempt in Switzerland may still be considered in determining the applicable tax rate on Swiss income.
DA-1 form for refund
To obtain a refund of excess foreign tax withheld, complete the DA-1 form and attach it to your Swiss tax return.
Practical example: Italy–Switzerland DTA
Marco moves to Lugano from Italy and owns an apartment in Milan (EUR 12,000/year in rental income). Under the DTA, real estate income is taxed in Italy. In Switzerland it is exempt but considered for the progression reservation.
Integration into the Swiss social security system
Moving to Switzerland means joining the three-pillar social security system:
1st pillar — AHV/IV (from the first day)
Mandatory contributions from the first day of work (5.3% employee + 5.3% employer). Bilateral agreements may recognise foreign contribution periods.
2nd pillar — Pension fund (BVG)
Mandatory if the annual salary exceeds CHF 22,680. For the first 5 years, voluntary buy-ins are limited to 20% of the annual insured salary.
3rd pillar — Private pension (3a)
From the first year you can contribute up to CHF 7,258 (employees with BVG, 2026). Contributions are fully deductible from taxable income.
Mandatory health insurance (LAMal)
You have 3 months from arrival to take out LAMal. Coverage is retroactive. Premiums are partially deductible.
Tax checklist for new residents
Key steps when moving to Switzerland:
- Register with the residents' registration office within 14 days of arrival
- Open a Swiss bank account (required for salary, rent, taxes)
- Take out LAMal health insurance within 3 months of arrival
- Inform your employer of your marital status and number of children for withholding tax
- Check your tax filing obligations in your country of origin (DTA)
- Open a pillar 3a account and contribute the maximum by 31 December
- Keep all documents related to income, assets, and deductible expenses
- If subject to withholding tax: evaluate whether it is worth requesting TOU
- Declare foreign property and bank accounts in your Swiss tax return
- Sign up for AccountEX to track deductible expenses from day one
Frequently asked questions
Do I have to pay taxes in Switzerland from the first day of arrival?
Yes. Tax liability begins from the date of registration with the residents' registration office or from the start of gainful employment. The first year's tax is calculated pro rata temporis.
Is income earned in my home country before the move taxed in Switzerland?
No. Pre-arrival income is not subject to Swiss tax. However, it may affect the progression reservation, and worldwide assets are relevant for wealth tax.
What is withholding tax and who is subject to it?
Withholding tax (Quellensteuer) is a monthly deduction taken directly from the salary. Subject: foreign nationals with B/L permits and income up to CHF 120,000/year. C permit holders and spouses of Swiss citizens switch to ordinary assessment.
Is it worth requesting TOU even if it is not mandatory?
It depends. TOU is worthwhile if actual deductions (3a, transport, training) exceed the flat-rate deductions. Simulate with the tax calculator — the request is often irrevocable.
Do I have to declare foreign accounts and property?
Yes. Switzerland taxes worldwide net wealth. All foreign assets must be declared. Income may be exempt through DTAs, but assets must still be reported.
How does double taxation work with income in two countries?
DTAs determine which state taxes each type of income. Employment income is taxed where the activity takes place, real estate income where the property is located. Tax credits and exemptions prevent double taxation.
Can I contribute to pillar 3a from the first year?
Yes. From the first year with AHV income you can contribute up to CHF 7,258 (employees, 2026). Contributions are deductible and are the most immediate way to reduce taxes.
How long do I have to file my tax return?
The deadline is between 31 March and 30 September of the following year, depending on the canton. For the first year, you will receive the form in the first months after arrival.
Practical tips for expats
- Open a 3a account as soon as possible and contribute the maximum by 31 December of the first year
- Keep all receipts for deductible expenses from the very first day of arrival
- Check the DTA with your country of origin: filing obligations may apply in both countries
- If your income is close to CHF 120,000, simulate TOU before making the request
- Choose your canton and municipality carefully: tax differences can amount to CHF 5,000–15,000/year
- Consult a fiduciary within the first year if you own assets abroad
- Use AccountEX to track income and deductible expenses from day one
Related guides
Learn more about the topics covered in this guide:
Simplify your Swiss accounting
AccountEX handles VAT, QR-invoices and bookings with AI. Start for free.
Start Free