Which Tax Deductions Can Expats Claim in Switzerland?

The Swiss tax return offers many opportunities to lower your tax liability. Expats working and living in Switzerland can benefit from these deductions too – whether they pay withholding tax or file a regular tax return. Many do not take full advantage of their options because they are unfamiliar with cantonal rules or the system of subsequent ordinary assessment (NOV). This guide explains which deductions are most important for expats in Switzerland and how to make the most of them.

Deductions for Withholding Tax

Expats with a B or L residence permit are generally subject to withholding tax, deducted directly from their salary. This deduction already takes into account basic factors such as marital status or children. However, expats can often claim additional deductions by filing a tax return.

This is possible through the subsequent ordinary assessment (NOV), which becomes mandatory once annual gross income exceeds CHF 120,000, but can also be requested voluntarily at lower income levels.

Key Deduction Options for Expats

Pension Contributions: Pillar 3a and Pension Fund Buy-Ins

• Contributions to Pillar 3a are among the most attractive deductions in Switzerland. Employees with a pension fund can contribute up to a legally defined maximum each year.
• Self-employed individuals without a pension fund can contribute significantly more (up to 20% of net earned income).
• Voluntary buy-ins to the pension fund are also deductible – especially useful for expats who may have gaps in their Swiss retirement accounts.

Work-Related Expenses

Expats can deduct various professional costs, just like all taxpayers:

• Commuting costs: public transport, car expenses (cantonal rules vary), bicycle flat rate (CHF 700 at federal level, CHF 800 in Basel-Stadt).
• Meal costs: if you have to eat out at lunchtime, flat-rate deductions are available.
• Work equipment: laptops, professional literature, specialized tools.

Medical and Accident Costs

Expenses not reimbursed by health insurance are deductible if they exceed a certain threshold (5% of net income for federal tax). This includes doctor’s fees, dental treatments, medication, or medically necessary transport.

Education and Training Costs

Professional education and training related to your work in Switzerland are deductible. This includes tuition fees, seminars, or specialized courses.

Family-Related Deductions

Expats with families benefit in particular from:

• Child deduction: CHF 6,600 under federal tax, higher in many cantons (e.g. Zurich CHF 9,000).
• Childcare costs: up to CHF 25,000 in Zurich, CHF 10,000 in Basel-Stadt, CHF 8,000 in Bern.
• Second earner deduction: for married couples with two incomes, up to CHF 14,100.

Interest on Debt

Interest on mortgages or personal loans can be deducted – up to a maximum amount (CHF 50,000 plus investment income under federal tax).

Insurance Premiums

Health and life insurance premiums are deductible up to certain limits. At federal level, the maximum is CHF 1,800 for individuals and CHF 3,600 for married couples. Many cantons allow higher amounts.

Donations

Donations to tax-exempt charitable organizations are deductible up to 20% of net income. Political donations are also deductible, with maximum amounts varying by canton.

Differences for Expats Compared to Swiss Citizens

Expats paying withholding tax must actively apply for deductions by filing a tax return. Without doing so, they often pay significantly more, as only flat withholding tax rates apply. Filing is especially worthwhile for families with children, high medical costs, or significant pension contributions.

Another difference: many expats have income or assets abroad. These must be declared in the tax return. While they are not usually taxed again in Switzerland, they are taken into account when determining the tax rate, which can increase the effective burden on Swiss income.

Practical Tips for Expats

• Plan ahead: Review potential deductions as early as January.
• Keep receipts: Without documentation, many deductions will not be accepted.
• Check cantonal rules: Maximum amounts vary significantly by canton.
• File a tax return: Even if you pay withholding tax, applying for a subsequent ordinary assessment can be worthwhile.
• Seek professional advice: Especially with international situations, specialists can help ensure all deductions are claimed correctly.

Conclusion: Expats Can Save Significant Taxes

Switzerland offers a wide range of deductions that expats can take advantage of. From Pillar 3a contributions and medical expenses to family-related deductions – a carefully prepared tax return can save thousands of francs per year. Most importantly: even expats who pay only withholding tax should check whether filing a tax return could reduce their overall tax burden. With good organization and awareness of cantonal differences, significant savings are possible.