At Work in Geneva


Tax system in Geneva


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There are 4 types of tax in Switzerland: income tax, wealth tax, tax on succession, capital gains tax.

Taxation is made according to your type of resident permit, either based on a self-declaration, or on a pay as you earn system. Usually, people with a B permit (except people without activity or property owners in Geneva), Ci, F, G, L have a PAYE system. C permits receive a tax declaration form that they have to complete.

If you are not Swiss, you do not work (you wish to take your retirement in Switzerland for example), and you hold a B or C permit, you can choose a lump sum taxation. This amount is based on your rental payments (or the rental value of your home), and has no relation to your real income or wealth.

There is no difference between your income from your salary and from investments; both depend on the same progressive rate of taxation. Switzerland offers an attractive system, with an annual tax rate around 25% while it is about 40% in most of the other European countries. In addition, the rate on individuals is modified depending on the number of dependant people and the size of the family and some private spending.

Several tax advantages increase the profitability of Switzerland for expatriates (possibility to deduct professional spending, indemnity to compensate the cost of living, deduction of school fees paid by the employer).

Charges

There are several mandatory charges

  • AVS (Assurance Vieillesse et Survivants - old age and survival insurance),
  • AI (Assurance Invalidité - disability insurance)
  • ADG (Assurance pour perte de gains - capital loss insurance).

The amount of charges varies depending on your stuation as an independant (contractor) or employee, but is around 6% for the employee (and 8% for the employer).

Tax

You can calculate, for each income, the tax amount here.

You will find more information on the State of Geneva website.

The contributions that you pay each year to the third pillar (see articles on Social Security and Pensions) may be deducted from your taxable income, up to the limit.

Maximum contributions 2005
with a pension institution 6 192 CHF
without a pension institution (max. 20% of the income) 30 960 CHF

During the duration of the plan, no wealth tax is due and income is excluded from tax. At settlement, the capital is taxed at a reduced rate, independantly of other income.

You will find other information on the tax forum in French-speaking Switzerland, very useful for tax questions in Geneva, and also on the Hôtel des Finances website.

Update 31/10/2005



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