If you're new to Switzerland and hold a B permit, it's important to understand how your tax obligations work. Most expats initially pay withholding tax, but depending on your income and personal situation, you may also need — or want — to file a Swiss tax return.
How are B-permit holders taxed in Switzerland?
Most expats on a B permit pay withholding tax (Quellensteuer). This means your employer deducts tax directly from your salary each month. In many cases, this is your final tax payment.
However, you must file a Swiss tax return in addition to paying at source if your gross income is CHF 120,000 or more per year. In some cantons, you may also need to file if you:
- Own property in Switzerland
- Earn additional income (e.g. investments or freelance work)
- Have significant wealth
Not sure whether you are required — or eligible — to file? Use our free B-Permit Calculator to check your canton, civil status, income and assets against the official thresholds in under a minute.
How are C-permit holders taxed in Switzerland?
Once you obtain a C permit, you are taxed like a Swiss citizen. This means you must file a Swiss tax return every year.
What happens if you switch during the year? If you receive your C permit during the tax year, withholding tax stops from the following month. You are then taxed under the ordinary rules for the whole year, and the tax at source already deducted is credited against your final tax.
Important: Once you move to a C permit, taxes are no longer deducted automatically. You will receive provisional tax bills. Many people choose to make voluntary advance payments to avoid a large tax bill later.
When is filing a voluntary Swiss tax return worth it?
Even if you are not required to file, it may be beneficial to apply for a voluntary tax return (NOV — Nachträglich Ordentliche Veranlagung) if:
- You live in a low-tax municipality. Withholding tax rates are based on an average cantonal rate. If your municipality has a lower rate, filing could reduce your bill.
- You are eligible for high deductions. Pillar 3a contributions (our calculator shows exactly how much they save you), long commuting costs, continuing education expenses, childcare costs.
- You have self-employed side income. Note that this income is not taxed at source, so it usually makes a tax return mandatory rather than optional.
Important: You apply for a voluntary tax return (NOV) by 31 March of the following year. The application cannot be withdrawn: you then file a tax return every year until your tax at source ends. Thinking about contributing to Pillar 3a as a B-permit holder? The tax deduction only applies once you file.
Need help understanding your situation?
Swiss tax rules for expats can be complex, especially when deciding whether to file a voluntary tax return, contribute to Pillar 3a, or switch from withholding tax to ordinary taxation. At FIN, we provide a personalised tax assessment to help you determine the most tax-efficient approach for your situation.