Switzerland’s Federal Department of Finance (FDF) announced an adjustment to the tax brackets and deductions for direct federal tax, effective from 2027, to compensate for a 0.47-percent increase in the cost of living since the last adjustment.
What does this change mean in concrete terms?
Parents paying for childcare will be able to deduct up to 25,900 francs – an increase of 100 francs. The deduction for vocational training rises to 13,100 francs, also an increase of 100 francs.
For married couples, the income threshold for entering the tax system rises to 29,900 francs. The maximum tax rate will now apply only to taxable income of 946,000 francs or more, up from the previous 941,000 francs. Withholding tax scales are being adjusted accordingly.
However, the deduction for professional expenses remains unchanged, with the amounts staying the same.
This is obviously positive news, but it only concerns federal taxes.
In Switzerland, taxes are distributed across the federal, cantonal, and communal levels – with the canton typically taking the largest share: 40 percent for the cantonal coffers, while the rest is split in equal parts (30 percent) by federal and municipal governments.
(The reason the canton is getting the biggest part of the tax revenues is that it provides more public services to the local population than the other two – for instance, healthcare, education, as well as various subsidies for low-income families).
Therefore, though the federal portion of your taxes will drop, the other ones will not – unless there are changes to that effect announced by your canton or municipality of residence.
Where in Switzerland are taxes lowest and highest?
You are likely to benefit from lowest cantonal tax rates if you live in Zug, Nidwalden and Lucerne.
Residents of Zurich, Solothurn and Bern, on the other hand, pay Switzerland’s highest taxes – nearly twice as high as the three lowest’ cantons.
In terms of municipalities, most tax-friendly are the towns of Baar and Walchwil – both, not surprisingly, in Zug.
The highest-bracket municipalities are found in canton Neuchâtel – Enges and Les Verrières – followed by Lausanne and Geneva.
You can find out tax rates where you live through this tool provided by Comparis consumer platform.
READ MORE: In which Swiss municipalities do individuals pay the least taxes?
