Main tax deductions

Main tax deductions

Professional and non-professional charges may be deducted from the taxable income. These deductions are related to the personal and family situation and will allow respective tax savings. Some of them can only be claimed at a cantonal level and others (for the majority) can be claimed at federal and cantonal levels. Deductions may differ from canton to canton.

Professional expenses

Under Swiss tax law, expenses related to the earning of income are deductible from the gross income. Employees can deduct commuting and meal costs as well as costs related to professional training or all other work-related expenses. Some of these deductions are often limited to a maximum amount and may be lump-sum deductions. Social security contributions paid are also deductible from the gross income. Regarding the social security contribution paid by the employer, they are not seen as an income and are therefore tax-free.

For self-employed taxpayers, all the deductions mentioned above will also be deductible. However, additional expenses related to the business will also be deductible. Thus, purchase costs of goods sold, rental costs of an office, communication costs, depreciation, amortization, etc. are deductible. In case the business performed losses, it is deductible from other income made during the same year (for example, the salary of a spouse). The losses can potentially be carried forward for a maximum period of seven years and can decrease the taxable income of the following years.

Personal and family deductions

Regardless of the professional activity, supplementary deductions can be claimed. Indeed, interest charges on private loans or mortgages are deductible as well as medical costs if a threshold is crossed , charitable contributions, childcare costs, child alimony, life insurance premiums (health and accident insurance), contributions to a 3a pillar, etc. For owners of real estate, the costs of maintenance can also be deductible from the property income (repair costs, property insurance, costs related to the property management, property tax ). Some of these deductions are often limited to a maximum amount and may be lump-sum deductions. 

In addition, personal allowances are granted based on the personal and family situation (for example single taxpayer or married couple, number of children, financial situation, etc.). As these deductions are defined in federal and cantonal law, the condition to meet may vary

Expatriate deductions

Taxpayers may be considered as expatriates under certain conditions. In such case, in addition to the deductions mentioned above, specific deductions related to their situation may be granted:

• Moving expenses.
• Travel expenses.
• Commuting expenses to and from Switzerland (if the family residence is still abroad).
• Costs of housing in Switzerland.
• Education costs for children (if the children are in Switzerland and there is no public education available in the child’s mother tongue).

Some cantons granted expatriates a lump-sum deduction instead of the above deduction.