Switzerland Fact-File Part 2:
Individual Business Domestic Taxation

2.4 Switzerland Personal Allowances and Business Deductions

Allowances and Deductions for Individuals in Business

All kinds of income are pooled together for tax purposes and income for a husband and wife is added together. Capital gains from the sale of property (with some exceptions) and retirement income are all taken into account when establishing the taxable base.

Generally, expenses incurred in running a business, including employment costs and property and maintenance costs and in general, most non-reimbursable items of expenditure are allowable deductions. Depreciation on business assets is also allowed provided proper records are kept. Interest payments are fully deductible as long as they relate to a property where business is carried out. Capital allowances (depreciation) are allowed but only in relation to business assets. Individuals in business may also deduct items such as alimony payments (the person receiving these payments will be liable for tax).

Additionally, health insurance costs, life insurance premiums, interest payments, social security contributions, and certain types of charitable donation may all be deductible; the rules governing deductions and allowances vary according to the canton, and as usual, expert advice is essential.

The first CHF12,600 (CHF24,500 for a married couple) of annual earnings is exempt from income tax.

Expatriates may claim relief in special circumstances with regard to expenses that may be deducted before tax, including moving expenses, housing costs (where a permanent residence is maintained in the person’s country of origin) and education costs for children.