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Glossary

Withholding Tax at Source

Withholding tax at source is an income tax deducted directly from wages. It applies to employees without a settlement permit who have tax residence or abode in Switzerland (DBG Art. 83 para. 1), as well as to employees resident abroad for employment income earned in Switzerland (DBG Art. 91 para. 1). From a gross income of CHF 120,000 in the tax year, a subsequent ordinary assessment is mandatory (QStV Art. 9). It is not the same as the Anticipatory Tax, which the Confederation levies on capital income.

At a glance

  • Liable to withholding at source are in particular foreign employees without a settlement permit and cross-border commuters without residence in Switzerland.
  • The employer deducts the tax from wages and remits it to the cantonal tax administration.
  • Not to be confused with the Anticipatory Tax, which the Confederation levies on capital income and which can be reclaimed.

Frequently asked questions

Liable to withholding at source are foreign employees resident in Switzerland who do not yet hold a settlement permit, as well as persons without tax residence in Switzerland who earn employment income here, in particular cross-border commuters. The employer deducts the tax directly from wages.
Withholding Tax at Source is a cantonally levied income tax on the wages of certain foreign employees. The Anticipatory Tax, by contrast, is a federal security tax on capital income such as interest and dividends, which can be reclaimed if correctly declared. These are two different procedures handled by different authorities.

Part of the topic

Personal Taxes

Sources: Eidg. Steuerverwaltung (ESTV) · Systematische Rechtssammlung (fedlex)

This entry is for general information purposes only and does not constitute investment, legal or tax advice. It is a simplified summary of the legal position and tax treatment.