Do expats taxed at source in Switzerland have to file a tax return?

Many people who move to Switzerland on a B or L permit never fill in a tax return. Their employer deducts tax from the salary every month: withholding tax, or Quellensteuer. That works until it does not: either because the law requires a return, or because the withholding tax is higher than it needs to be.

Who must file

Since 2021, if you live in Switzerland, are taxed at source and your gross salary is above CHF 120,000 a year, a full tax return is mandatory. The tax office calls this the subsequent ordinary assessment. The same applies if you have other income or assets above the limits of your canton. If you are married and one of you is above the threshold, you both file.

Who may file

Below CHF 120,000 you can apply for an ordinary assessment yourself. The deadline is 31 March of the following year. Once you apply, the decision stays: you file a tax return every year from then on, as long as you are taxed at source.

When filing pays off

The withholding tax rates include standard amounts for common deductions. If your real deductions are higher, a tax return can bring money back. Typical reasons:

• Pillar 3a payments, which are not taken into account in the withholding tax
• Buy-ins into the pension fund (pillar 2)
• Childcare costs
• A long commute or high professional expenses
• Further education
• Interest on debts, such as a mortgage

If none of these apply to you, filing may change little, and you take on a yearly obligation. It is worth checking with your figures before applying.

Common mistakes

• Missing the 31 March deadline. A late application is not accepted.
• Paying into pillar 3a and never claiming it.
• Assuming the employer's deduction is final when the salary has passed CHF 120,000 during the year.
• Forgetting foreign income, bank accounts or property abroad. In a tax return they have to be declared.

What I take from it

Withholding tax is convenient, but it is a flat rate on a personal situation. A short check once a year shows whether it fits. That is what Taxed does for expats living in Switzerland.

This note is general information, not individual tax advice. Rules differ in detail between cantons.