How to Declare Foreign Income or Real Estate in the Swiss Tax Return

As a person tax-resident in Switzerland, you are obliged to declare your worldwide income and assets – including all values held abroad. Correct disclosure is essential for legal certainty and to make optimal use of double taxation agreements (DTAs). (As of: 2025 tax year)

Important note: This article provides general information on declaration obligations in Switzerland. For complex cross-border situations, advice from a specialist in international tax law is recommended. Rules may vary by canton.

General declaration obligation for foreign assets

Worldwide tax liability in Switzerland

If you are tax-resident in Switzerland, you are subject to unlimited tax liability. This means:

• You must declare not only Swiss income and assets but all foreign values in your tax return.
• Tax liability arises when you permanently establish your habitual residence in Switzerland, stay for at least 30 consecutive days in paid employment, or stay for at least 90 days without gainful employment.
• Non-residents (without a Swiss domicile) are taxed only on Swiss sources of income and do not generally need to declare foreign assets.

What must be declared?

The following foreign assets must be included in the Swiss tax return:

• Earned income from employed or self-employed activity abroad
• Investment income (interest, dividends, other returns) from foreign sources
• Real estate abroad (assets and income)
• Securities and bank balances at foreign banks and depositories
• Cryptocurrencies regardless of where they are held
• Foreign pension assets (occupational pension funds, individual pension plans)
• Inheritances and gifts received from abroad (declared as assets)

Declaring foreign income

Where is foreign income entered?

Depending on the type of income, the entry is made in different sections of the tax return:

• Employment income from abroad: Together with domestic employment income (main form); fully taxable unless a DTA assigns taxation rights to the country of activity.
• Self-employment income from abroad: Added to taxable income; a separate set of accounts must be enclosed.
• Interest and dividends from foreign sources: To be listed in the securities and assets schedule; gross amounts before foreign withholding deductions are to be stated.
• Rental income from foreign real estate: To be declared under property income.
• Foreign pensions and annuities: Generally to be declared as income; DTA provisions may limit taxation rights.

Currency conversion

All foreign amounts must be converted into Swiss francs:

• Use the official annual average exchange rates of the Federal Tax Administration (ESTV/AFC), published each year.
• For the declaration of assets, the rate on 31 December of the tax year applies.
• The ESTV rate list is authoritative; self-calculated or current-day rates are generally not permitted.

Foreign withholding tax deducted abroad

When foreign withholding tax (e.g. on dividends) has been deducted abroad, it can often be reclaimed or credited:

• Reclaim via DTA: In the source country, you can claim a refund down to the reduced DTA withholding rate (e.g. 15% instead of 30% on dividends).
• Credit in Switzerland: To the extent a full reclaim is not possible, part of the foreign withholding tax can be credited against Swiss tax liability (Form DA-1 for federal tax; cantonal forms apply for cantonal tax).

Declaring foreign real estate

Asset and income declaration

Foreign real estate must be recorded both as an asset and as income in the tax return:

• Assets: Listed in the property schedule with taxable value, debts, and debt interest.
• Income: Rental income, the imputed rental value for owner-occupied properties (until the reform takes effect, expected no earlier than 2028 – see below), and maintenance costs.

Imputed rental value for foreign property – important transitional rules 2025

The Swiss electorate voted on 28 September 2025 with 57.7% of votes in favour of abolishing the imputed rental value (Eigenmietwert). This affects both domestic and foreign owner-occupied properties:

• Until the reform takes effect (no earlier than 1 January 2028): The existing system continues unchanged. Anyone who owns and occupies a property abroad must continue to declare an imputed rental value as income.
• After the reform takes effect (no earlier than 2028, date to be set by the Federal Council): The imputed rental value will also be abolished for foreign properties. Correspondingly, the existing deductions for debt interest and maintenance costs for owner-occupied properties will also fall away.
• Until then, the following rates apply for estimating the imputed rental value of foreign properties in the inter-cantonal tax apportionment: typically around 60–70% of the market annual rent; cantonal rules may differ.

Valuation of foreign real estate

• Valuation is based on market value (fair value) as of 31 December of the tax year.
• Acceptable bases include: purchase price (if current), official cadastral or tax values from the foreign country, appraisals by a real estate professional, comparable values from the local market.
• The declared value must be realistic, plausible, and documentable.
• For properties in countries where official tax values deviate significantly from market value, the tax authority may request a plausible market valuation.

Tax apportionment for foreign real estate

The tax authority carries out an inter-cantonal and international tax apportionment based on your declaration:

• Foreign real estate is generally assigned to the country where it is located for taxation purposes; Switzerland does not typically tax these income streams directly.
• However, the value of the foreign property affects the tax rate applied to your other Swiss income (rate-determining inclusion).
• DTAs govern which country has primary taxation rights and how foreign taxes are credited in Switzerland.

Losses from foreign real estate – rule since 2021

From the 2021 tax period onwards, the rules for losses from foreign real estate were tightened at federal level:

• Previously (up to 2020): Surpluses of debt interest and maintenance costs from foreign properties could be directly offset against Swiss income.
• Now (from 2021): These losses are only taken into account on a rate-determining basis – they no longer directly reduce taxable income, but only influence the applicable tax rate.
• Actual maintenance, administration, and financing costs can still be claimed – but only for rate-determination purposes, not to reduce taxable income.
• This rule applies at federal level; cantonal regulations may differ.

Cryptocurrencies and digital assets

Declaration obligation and valuation

Cryptocurrencies must be declared as assets in the tax return:

• Asset declaration: Listed in the securities and assets schedule; a printout of the wallet balance at year-end (31 December) is sufficient as evidence.
• Valuation: The ESTV publishes an annual list of tax values for the most important cryptocurrencies. For currencies not on the ESTV list, the market price at year-end is authoritative.
• Capital gains in private assets: Generally exempt from income tax (tax-free private capital gain), provided there is no professional trading activity. Capital losses are correspondingly not deductible.

Mining income

• Income from cryptocurrency mining is treated as taxable income from self-employment or employment activity.
• The income is valued at the market price of the coins received at the time of receipt.
• A schedule of income and expenses (including electricity, hardware, etc.) must be enclosed with the tax return.
• For professional or commercial cryptocurrency trading, capital gains can also become subject to income tax. Key criteria include holding period, volume, and frequency of transactions.

Asset management costs for foreign investments

For managing foreign securities and accounts, you have a choice:

• Flat-rate deduction: 3‰ of the declared securities portfolio (simplified, no proof required).
• Actual costs: Real management fees, custody and banking fees (proof required via account statements).
• Important: Both methods cannot be combined. Anyone using the flat-rate deduction cannot additionally claim actual costs – and vice versa.
• The actual cost deduction is only worthwhile with above-average management fees.

Automatic Exchange of Information (AEOI)

How it works

Under the AEOI, partner countries automatically exchange information about financial accounts. For persons residing in Switzerland, this means:

• Foreign banks and financial institutions transmit account information (balance, income, account details) to the authorities of their country.
• These authorities automatically forward the data to the Swiss tax authorities.
• The AEOI now covers over 100 partner countries; virtually all major financial centres are included.

Consequences for undeclared assets

• Undeclared foreign accounts and securities will in all likelihood be discovered through the AEOI.
• Supplementary tax assessments are possible: evaded taxes can be demanded retrospectively for up to 10 years (up to 15 years for federal tax), plus interest.
• Fines: Depending on the severity and degree of fault, between one-third and three times the supplementary tax.
• A voluntary disclosure is only penalty-free if the authorities are not yet aware of the offence.

Voluntary disclosure

• A penalty-free voluntary disclosure (once only) is possible if the tax evasion has not yet been discovered.
• Important: A silent declaration in the tax return without an explicit reference to a voluntary disclosure is not treated as a voluntary disclosure and can result in a fine.
• The voluntary disclosure must be explicitly labelled as such and submitted to the competent tax authority.
• Supplementary taxes (including interest) are levied, but no fine.

Making use of double taxation agreements (DTAs)

Switzerland has concluded DTAs with over 100 countries. These can prevent the same income from being fully taxed in two countries:

• Typical DTA provisions: Earned income taxed in the country of activity or residence; real estate income usually in the country where the property is located; dividends at a reduced withholding rate; pensions in the country of residence.
• Application: The tax authority generally carries out the tax apportionment automatically; however, you must provide correct and complete information.
• Form DA-1: To credit foreign withholding taxes against direct federal tax, Form DA-1 must be submitted. Cantons have equivalent forms for cantonal tax.
• Important: DTAs give you entitlements to relief in the source country – but these must be actively claimed (e.g. via the source country's refund form).

Special situations

Cross-border workers (Grenzgänger)

Persons who work in Switzerland and live in neighbouring countries (or vice versa) are subject to special bilateral cross-border worker agreements (e.g. CH-DE, CH-FR, CH-IT). Those living abroad and working in Switzerland are usually subject to withholding tax (Quellensteuer) and have limited declaration obligations in Switzerland.

Diplomats and staff of international organisations

Staff of international organisations (e.g. UN, ICRC, WTO) enjoy special tax immunities. These vary by organisation and employment contract. Swiss tax liability on other income not covered by immunity continues to apply.

Inheritances received from abroad

• Foreign inheritances must be declared as assets (at their value at the time of acquisition).
• Switzerland levies no federal inheritance tax; cantonal inheritance taxes concern Swiss estates of persons resident in Switzerland, not foreign assets.
• Inheritance taxes levied abroad are generally payable in the relevant country; DTAs covering inheritance and gift tax are rare (Switzerland has very few such agreements).

Avoiding common mistakes

Common errors

• Incomplete declaration: Even small amounts, minor accounts, or occasional foreign income must be declared. There is no minimum threshold for foreign income.
• Incorrect currency conversion: Always use the official ESTV rates, not current daily rates or self-calculated figures.
• Undervaluation of foreign real estate: Values that are too low lead to queries and may be treated as tax evasion.
• Missing documentation: Without supporting documents (bank statements, tenancy agreements, purchase contracts, appraisals), corrections are difficult and queries are likely.
• Confusing rate-determining and taxable: Foreign income can increase the tax rate in Switzerland even when it is taxed directly abroad.
• Forgetting cryptocurrencies: The location of custody (wallet, foreign exchange) is irrelevant to the declaration obligation in Switzerland.

Tips

• Collect documents: Bank statements, interest certificates, dividend confirmations, tenancy agreements, property valuations, wallet printouts.
• Use the ESTV rate list: Updated annually at estv.admin.ch; includes year-end and annual average rates for all major currencies, as well as rates for cryptocurrencies.
• Check Form DA-1: If foreign withholding taxes have been deducted, a credit in Switzerland may be possible.
• Seek professional help for complex cases: With multiple foreign properties, professional crypto trading, cross-border self-employment, or unclear DTA applications, advice from a tax specialist is worthwhile.

Conclusion

Correctly declaring foreign income and assets is an obligation for everyone tax-resident in Switzerland, and compliance is increasingly monitored through the automatic exchange of information. The key points in summary:

• Declare worldwide income and assets without exception.
• Use the official ESTV exchange rates for conversion.
• Value foreign real estate at market value and declare income (including the imputed rental value until the reform takes effect in 2028).
• The abolition of the imputed rental value (referendum of 28 September 2025) also applies to foreign properties, but takes effect no earlier than 1 January 2028.
• Losses from foreign real estate have been rate-determining only since 2021.
• Take the AEOI seriously: Undeclared assets will be discovered; a voluntary disclosure is only penalty-free while authorities have no knowledge.
• Use DTAs and Form DA-1 actively to avoid double taxation.