Insights

Geneva Citizens approved the reform of personal income taxation in Geneva.

Employed persons who are members of a pension fund can pay a maximum of CHF 7’056 into pillar 3a in 2024. The amount paid in can be deducted from income in the personal tax return 2024. Employees who are not affiliated to a pension fund may pay in a maximum of 20 % of their net income, the maximum amount is CHF 35’280. A payment can only be made in the corresponding calendar year, retroactive payments after the end of the calendar year are not possible.

The current valuation of real estate in the Canton of Zurich dates back to 2009. Several court rulings in recent years have confirmed that the current tax values are lower than market values and no longer comply with federal law. According to federal regulations, the taxable value of a property must not be less than 70% of its market value, and the imputed rental value must not be less than 60% of the market rent. An expert report commissioned by the cantonal tax office determined that, since 2009, market values of single-family homes and condominiums in the Canton of Zurich have increased by an average of over 50%, while rents for rental apartments have risen by around 15%. This prompted a revaluation of all properties, which will take effect on January 1, 2026.

Employed persons who are affiliated to a pension fund can pay a maximum of CHF 7,056 into pillar 3a in 2024. In 2024, the maximum Pillar 3a amounts remain unchanged compared to 2023.

If a profit is made through the sale of a property in Liechtenstein, the seller must pay property gains tax (Grundstücksgewinnsteuer). The tax is levied on the difference between the initial investment costs and the proceeds of the sale. The investment costs include not only the purchase price but also, for example, value-enhancing expenses. It is not always clear whether a measure is value-enhancing or merely value-maintaining. Christian Reichert and Michael Heeb have summarised the topic in an article in the Wirtschaftregional of 10 February 2023, explaining how the real estate gain is calculated, which special cases exist and why you should already keep the tax in mind when acquiring a property.

Increase in maximum pillar 3a deductions in the 2023 tax year.

The right to deduct import tax is subject to certain legal requirements. In addition, the company must be able to document a claimed import tax deduction. However, despite the principle of free assessment of evidence, not every document related to an import is suitable for proving the claim to an import tax deduction in a legally adequate manner.

One way for a company to improve long-term employee retention and to attract new employees is through an employee share scheme. When setting up these schemes, however, caution is required as there are several tax pitfalls. The focus when companies choose these schemes is often on including employees in decision-making and giving them information, with less attention paid to questions about tax. However, the level of tax burden can significantly influence how attractive an employee share scheme is for both the employer and employee. In their article, Michael Rupp and Christian Reichert explain the key points for both sides and use an example to show how the tax burden is calculated in Liechtenstein.

Provided certain conditions are met, private individuals with tax residence in Liechtenstein can claim credit for foreign withholding taxes on investment income (such as interest or dividends) in Liechtenstein. This was previously impossible with fund investments due to the tax administration’s implementation of the law. However, a recent decision of the Liechtenstein Administrative Court (VGH) modified the way in which the law is implemented. For private investors, this circumstance raises the question of how they can ensure that taxes that are withheld in the context of funds can be credited. On the other hand, the funds themselves may now be subject to greater reporting requirements.

Measures to help stop the spread of the COVID-19 virus during the pandemic have forced many workers in Liechtenstein and Switzerland to work from home if possible. Due to this development, on 22 October 2020, both countries signed an agreement to determine the effects of the COVID-19 measures on cross-border commuters by mutual agreement.

Your business and your investments are global – and so are you. Individuals are taxed on their worldwide income in almost every country. For wealthy internationals it can be quite burdensome and difficult to gather all the information needed for their domestic tax assessment. Liechtenstein lump sum tax (also called expense-based tax) offers an easy and attractive solution for individuals considering to relocate to Liechtenstein.

On 16 January 2015, the Swiss Federal Department of Finance published the revised wording of the federal expatriate ordinance which became effective on federal level on 1 January 2016. Generally, the competent cantonal tax authorities have adapted their assessment guidelines on municipal and cantonal level accordingly. The definition of an expatriate will be narrower and the tax deductible deductions expatriates can claim will be restricted.

By end of 2014, Swiss voters decided by a clear majority to maintain the lump-sum taxation regime. At federal level the requirements to qualify for being taxed under the lump-sum regime will be slightly amended. Cantonal regulations also consider adjustments to ensure an attractive and pragmatic lump-sum taxation regime for selected individual tax payers.

Liechtenstein is a constitutional hereditary monarchy located at the heart of Europe. The high standard of living, its neutrality, political and legal stability make it a very attractive location for individuals to take up residence. With its reasonable tax rates, an ever-increasing network of tax treaties and many tax planning opportunities, Liechtenstein offers an attractive environment for business activities and taking up residence. Below, you find a short overview of the Liechtenstein tax system and a range of selected tax planning opportunities.

Located at the heart of Europe, Switzerland is an attractive country to take up residence and employment. Its high standard of living, its legal and political stability, a well-developed infrastructure and a very low taxation regime with a broad double tax treaty network offer an attractive environment for employment and business opportunities. The purpose of this fact sheet is to provide a short overview of the Swiss tax system for individuals and a presentation of selected tax related planning opportunities.