Swiss Wealth Tax Explained
The Swiss wealth tax is levied solely on a cantonal level. In most cantons, the tax burden on assets exceeding CHF 200’000 is between 0.2% and 1% percent.
Valuation of assets components
Generally speaking, the following assets are considered as taxable:
- Immovable assets: the valuation of the foreign property varies according to the canton of residence. If there is a foreign official value, the tax administration usually relies on said value. Other cantons, on the other hand, require a copy of the purchase contract and determine the tax based on it.
- Movable assets: assets owned all over the world must generally be stated in the tax return with their value as of December 31. This also applies to rental deposits deposited in the savings account.
Tradable equities, bonds, fund units and structured products must be declared at the tax price as per the price list of the Federal Tax Administration. On a separate note, pension fund entitlements as well as Pillar 3a assets are tax-exempt as long as they are not paid out.
- Precious metals: the market value must be declared in accordance with the bank statement.
- Life insurance: cancelable life and annuity policies are taxed at their surrender value.
- Motor vehicles, boats, etc.: usually declared at market value and the depreciation is 40 % of the residual value per year. Leased vehicles are not declared, since one is not the owner of the vehicle. Therefore, the vehicle is not a taxable asset.
- Personal belongings: these are tax-exempt as long as it is not an actual collection.
- Collections: taxed at market value.
The proven debts can be deducted from the gross wealth. This results in the net wealth. Various cantons apply social deductions which take into account factors of the taxpayer such as marital status or number of children. It should be noted that social deductions and tax allowances differ among cantons.
Wealth taxes are levied annually for the corresponding tax year. Taxable assets are calculated on the basis of the situation at the end of the relevant tax year and most are valued at market value. Worldwide assets must be declared, not solely those in Switzerland. Debts can be deducted, which reduces taxable assets. Since wealth tax is only levied on a cantonal level, tax rates, progressions and social deductions vary between cantons.