Switzerland Personal Income Tax

Tax system in summary. Switzerland’s complex tax structure has been shaped by the country’s three levels of government, which are federal, cantonal and municipal. The following two distinct taxes are levied:

  • Federal taxes
  • Cantonal and municipal taxes

Swiss federal tax law is uniform throughout Switzerland, but each of the 26 cantons has a separate law for cantonal taxes. Municipal taxes are levied as a multiple of cantonal taxes. Because tax laws and tax rates vary widely among cantons and among municipali­ties, the choice of residence is an important element of tax planning.

No average tax rates can be calculated because of the multilayered tax system. Taxes are calculated based on specific figures for specific cantons and municipalities. The maximum overall rate of federal income tax is 11.5%. The various cantonal and municipal taxes are also levied at progressive rates, with a maximum com­bined cantonal and municipal rate of approximately 35%. In addi­tion, cantonal and municipal net wealth taxes are levied.

The federal Supreme Court and tax administration have devel­oped rules for allocating tax liability among the cantons to avoid double taxation.

Federal taxable income. Individuals establishing tax residence in Switzerland are assessed for federal income tax purposes on a current-year basis.

Special rules apply for the first year a taxpayer is subject to Swiss tax. In addition, the basis of assessment may be altered if certain extraordinary events substantially change an individual’s financial situation (for example, change of business or profession, or divorce or legal separation).

In general, taxable income for federal tax purposes consists of all types of income earned by a resident individual, including the following:

  • Remuneration from an employer (base salary, bonus, stock op tions, home leave, and payment of rent, taxes, school fees and utilities)
  • Self-employment or business income
  • Pension payments and compensation for loss of work or health
  • Income from private investments (including interest and divi­dends)
  • Income from real estate

Although income derived from either a fixed place of business or a permanent establishment located abroad, as well as income de rived from real estate located abroad, are exempt from taxation, this income must be properly recorded on a Swiss tax return for the determination of the tax rate (exemption with progression).

Cantonal and community taxable income. At the cantonal level, tax is also assessed on a current-year basis. Taxable income for cantonal and community tax purposes is calculated in basically the same way as taxable income for federal taxes.

Who is liable. An individual who is resident or domiciled in Switzerland is subject to federal, cantonal and municipal taxes on worldwide income, except income derived from real estate located abroad and income from either a fixed place of business or a permanent establishment located abroad. Individuals are subject to Swiss income tax and net wealth tax (see Section B) from their first day of residency until they officially leave the country.

Nonresidents are subject to tax on income from the following Swiss sources:

  • Interest in Swiss real estate
  • Interest in a Swiss partnership or sole proprietorship
  • Trade or business attributable to a Swiss permanent establish­ment or fixed place of business
  • Professional practice in Switzerland
  • Trade and agency of real estate located in Switzerland
  • Services performed in Switzerland (with exceptions)
  • Interest income derived from a mortgage secured by Swiss real estate
  • Services rendered as a director or officer of a Swiss corporation (with exceptions)
  • Payments by Swiss pension funds

Individuals are considered resident in Switzerland if they take up legal residence in Switzerland or if they intend to stay there for a certain period (usually longer than one month), as well as if they work in Switzerland for a period exceeding 30 days.

Income subject to tax. The taxation of various types of income is described below.

Employment income. In general, all compensation provided by an employer is considered employment income and is included in the employee’s overall taxable income. However, if properly documented, certain reimbursements for necessary business-related expenses are not subject to tax.

Both residents and nonresidents who remain in Switzerland for employment purposes are subject to tax on employment income. In general, residents are not subject to withholding tax on em ployment income. Residents with certain types of work per­mits, however, and most nonresidents are subject to withholding tax on employment income.

Self-employment and business income. Self-employment and bus­iness income is included in overall taxable income. A partnership is not taxed as a separate entity; rather, the respective shares of partnership profit are included in the taxable income of each partner. All necessary expenses incurred in operating a business or profession are tax-deductible. Self-employed individuals may carry forward business losses if these losses cannot be offset against other taxable income. No carrybacks are allowed for self-employed individuals.

Directors’fees. For residents, directors’ fees received from a Swiss company are included in the taxpayer’s overall taxable income. Directors’ fees remitted from a foreign country are generally included in a resident’s overall taxable income, unless an appli­cable double tax treaty provides otherwise. For nonresidents, directors’ fees received from a Swiss company are subject to withholding tax (at a rate of 25% in the Cantons of Geneva and Zurich) and social security contributions (unless the terms of an applicable totalization agreement specify otherwise).

Investment income. A withholding tax of 35% is levied on divi­dends; on interest from publicly offered bonds, from debentures and from other instruments of indebtedness issued by Swiss resi­dents; and on bank interest (in excess of CHF200 per year), but not on normal loans. For Swiss residents, withholding tax is fully recoverable. For nonresidents, withholding tax is a final tax, unless the terms of an applicable double tax treaty specify other­wise.

Dividends received are taxed as ordinary income. However, if the recipient of a dividend owns at least 10% of the share capital of the payer company, only 60% of the dividend is taxable for the purpose of the federal income tax. Some cantons have adopted similar rules.

Rental income and royalties, as well as licensing, management and technical assistance fees, are not subject to withholding tax. With certain exceptions, they are included in taxable income and are taxed by the federal government, cantons and municipalities.

Taxation of employer-provided stock options. Under federal law, equity-based compensation schemes are taxed at vesting (restrict­ed stock units), at exercise (stock options that are not tradable or restricted) or at grant (tradable and unrestricted stock options, and free shares). The cantons also apply these rules.

In addition, the equity gain is allocated to Switzerland on the basis of the number of workdays performed in Switzerland dur­ing the vesting period.

Income derived from equity is taxed together with other income at ordinary tax rates. In addition, social taxes are levied on equity income.

The subsequent sale of the shares triggers no further tax conse­quences because private capital gains are exempt from tax in Switzerland.

Capital gains and losses. Private capital gains derived from sales of movable assets are not taxed at the federal level or at the cantonal level. Capital gains derived from sales of immovable assets are subject to a separate tax in all cantons.

For federal tax purposes, a gain or loss from a sale or exchange of business assets is treated as ordinary income or an expense item. For cantonal tax purposes, the treatment is the same, except that some cantons levy a separate tax on gains from sales or exchang­es of immovable assets.

Deductions

Deductible expenses. Necessary expenses incurred in connection with employment income, maintenance and operating costs of real estate, any kind of debt interest, contributions to qualified pension plans, Swiss or foreign compulsory social security premiums, and other specific items are deductible from taxable income. For some expenses, tax-deductible amounts are standardized (insur­ance premiums, education costs and lunch expenses). These rules apply for federal as well as cantonal and municipal taxes. How­ever, other items may be treated differently among the cantons.

For expatriates (as defined), an annual deduction of CHF18,000 is allowed, which is intended to cover an expatriate’s housing fees and other expenses related to being an expatriate. Expenses in excess of CHF18,000 may be deductible if they can be proven. Other typical expenses of an expatriate, including moving expenses and tuition, are also deductible.

Personal deductions and allowances. No specific personal deduc­tions and allowances are granted to individual taxpayers, except some minor standardized deductions granted in most cantons (for example, deductions for children).

Business deductions. Nonresidents may deduct necessary expenses incurred in operating a business or profession and in the mainte­nance and operation of rental property.

Lump-sum taxation. Resident aliens and Swiss citizens who were resident or domiciled abroad for the past 10 years may qualify for a special tax concession called lump-sum taxation if they do not engage in any employment or carry on a business in Switzerland. Activities outside Switzerland are not taken into consideration. The lump-sum tax is imposed on income imputed from the living expenses of taxpayers and their families (for example, by a multiple of rental value). The amount of lump-sum tax may not be less than the tax that would be payable on the sum of the following items:

  • Income from Swiss real property
  • Income from Swiss investments
  • Income from any other property located in Switzerland
  • Income from Swiss-source patents, copyrights and similar prop­erty rights
  • Pensions or annuities paid from Swiss sources
  • Foreign income, if treaty exemption is claimed

Several cantons allow a non-working resident to elect lump-sum taxation instead of regular income tax.

In certain cantons, lump-sum taxation is granted for only a limited number of years. In many cantons, eligibility for lump-sum tax­ation and the method of calculating the tax payable are negotiated individually with the tax authorities rather than statutorily deter­mined.

Rates. The maximum overall federal tax rate is 11.5%.

Cantonal tax rates vary considerably from one canton to another, although all rates are progressive. The tax rate consists of a base rate multiplied by a coefficient, which may change from year to year. The municipal tax rate is usually a percentage of the can­tonal rate. Therefore, the overall rate varies within a canton, de pending on the municipality where a taxpayer resides. In most cantons, a church tax is also levied as a percentage of the can­tonal rate for taxpayers who are members of an official Swiss church community. Maximum cantonal and municipal tax rates range from approximately 14% to 35%.

Other taxes

Net wealth tax. No net wealth tax is imposed at the federal level. All cantons and municipalities levy net wealth tax on worldwide assets, with the exception of real estate, a fixed place of business, or a permanent establishment located abroad. Tax rates are reason­ably low and vary widely, depending on the canton and munici­pality where the taxpayer resides.

Inheritance and gift taxes

Cantonal taxes. No inheritance or gift taxes are imposed at the federal level. However, all cantons levy separate inheritance and gift taxes. Rates vary widely depending on the canton where the deceased or donor is domiciled.

In most cantons, resident foreigners are subject to inheritance tax and gift tax on worldwide assets, except for real estate located abroad. Nonresidents are subject to inheritance tax and to gift tax on real estate located in Switzerland only.

Treaties. To prevent double taxation, Switzerland has entered into inheritance tax treaties with the following jurisdictions.

Austria                         Germany                         Sweden

Denmark                      Netherlands                     United Kingdom

Finland                         Norway                           United States

Social security

Swiss retirement benefits are derived from the following sources:

  • The mandatory social security system (old-age and survivors’ insurance). Pensions are based on premiums paid and on the number of years worked. Benefits generally satisfy minimum living requirements.
  • Company pension plans. Pension plans must be segregated from the company. These benefit plans complement the benefits of the Swiss social security program and are compulsory for employ­ees subject to the old-age and survivors’ insurance.
  • Individual savings.

Employees. The Swiss social security contribution rate is 10.3% of total salary, with no ceiling; the employer and employee each pay 5.15%. The employee’s share is withheld monthly by the employer. In addition, contributions at a rate of 2.2% on annual salary up to CHF126,000, and 1% on annual salary exceeding CHF126,000 must be made to the unemployment insurance fund. This cost is also divided equally between the employer and em­ployee.

In general, employees who pay into the Swiss social security system must contribute to a pension plan. The employer must make contributions of at least 50% of the total contribution.

Contributions to both schemes are fully tax-deductible. Further­more, contributions to special types of individual savings schemes are tax-deductible, up to a certain amount.

Self-employed individuals. Self-employed individuals must make social security contributions at a maximum rate of 9.7% of their income from their business or profession. The 9.7% rate also ap­plies to partnership profits. Self-employed persons are not required to be members of a pension plan.

Nonresidents. Nonresidents who carry on a business activity within Switzerland (including serving on the board of a Swiss company) are subject to Swiss social security contributions on income derived from that activity, unless a social security treaty provides otherwise.

Totalization agreements. To provide relief from double social security taxes and to assure benefit coverage, Switzerland has entered into totalization agreements, which usually apply for a period of two years but may extend to five years, with the follow­ing jurisdictions.

Australia                           Iceland                        Poland

Austria                              India                           Portugal

Belgium                            Ireland                        Quebec

Bulgaria                            Israel                          Romania

Canada                              Italy                            San Marino

Chile                                 Japan                          Slovak Republic

Croatia                              Korea (South)             Slovenia

Cyprus                              Latvia                         Spain

Czech Republic                 Liechtenstein              Sweden

Denmark                           Lithuania                    Turkey

Estonia                              Luxembourg               United Kingdom

Finland                              Macedonia                  United States

France                               Malta                          Uruguay

Germany                           Netherlands                Yugoslavia

Greece                               Norway                      (former)*

Hungary                            Philippines

* This treaty applies to Bosnia and Herzegovina, Montenegro and Serbia.

Totalization agreements with Brazil and China have been signed but are still under the parliament ratification process. Negotiations are in progress with Argentina.

Under the totalization agreements, if certain conditions are met, exemption from the Swiss social security system is available for a certain period if employees continue to contribute to their home country social security systems.

Under an agreement between Switzerland and the European Union (EU), Switzerland has applied European Regulation 883/2004 since 1 April 2012 (European Regulation 1408/71 before that date), which overrules the bilateral totalization agreements listed above with respect to Swiss and EU nationals.

Effective from 1 January 2016, EU Regulation 883/2004 applies to moves between Switzerland and European Free Trade Association (EFTA) countries (EU Regulation 1408/71 previ­ously applied). A transition period of 10 years applies to ongoing situations.

Tax filing and payment procedures

Federal taxes are due 31 March of each year. Tax filing and pay­ment procedures vary widely from canton to canton and also depend on individual circumstances.

Married persons are taxed jointly, not separately, on all types of income.

In general, nonresidents must file tax returns if they have income from certain sources, including employment, which is taxed at the regular rates. In most cantons, directors’ fees and payments by Swiss pension funds are subject to special withholding provisions (covering cantonal and municipal, as well as federal, income taxes).

Double tax relief and tax treaties

Income is allocated in accordance with rules developed by the federal Supreme court on intercantonal tax allocation, unless an applicable double tax treaty provides otherwise. In addition, cer­tain cantonal rules may influence international income allocation. How ever, treaty law always overrules Swiss domestic law.

According to Swiss domestic law and treaty regulations, foreign-source income is excluded from taxable income if it is derived from a permanent establishment located in a foreign country (as defined by treaty law or, in the absence of an applicable double tax treaty, by Swiss domestic law). Also excluded is income derived from real estate located abroad. In addition, certain types of income, includ­ing directors’ fees, special pensions and partnership profits, may be exempt in Switzerland under an applicable treaty.

In general, all other foreign-source income is taxable in Switzer­land. In the absence of a treaty, foreign-source income is taxed net of any foreign income taxes or withholding taxes imposed on such income by the source country.

Most of Switzerland’s income tax treaties follow the draft model of the Organisation for Economic Co-operation and Develop­ment (OECD). Switzerland generally applies the exemption­with-progression method rather than the tax-credit method for qualified foreign-source income. A limited tax credit is granted, how ever, for remaining net foreign withholding taxes imposed on dividends, interest and royalties from the following treaty coun­tries. The credit may not exceed Swiss tax due on the relevant income.

Switzerland has entered into double tax treaties with the follow­ing jurisdictions.

Albania                            Iceland                         Poland

Algeria                            India                             Portugal

Argentina                        Indonesia                     Qatar

Armenia                          Iran                              Romania

Australia                          Ireland                          Russian

Austria                            Israel                            Federation

Azerbaijan                       Italy                              Serbia

Bangladesh                      Jamaica                        Singapore

Barbados                         Japan                            Slovak Republic

Belarus                            Kazakhstan                   Slovenia

Belgium                           Korea (South)              South Africa

Bulgaria                           Kuwait                         Spain

Canada                            Kyrgyzstan                   Sri Lanka

Chile                                Latvia                           Sweden

China                               Liechtenstein                Tajikistan

Colombia                         Lithuania                      Thailand

Côte d’Ivoire                   Luxembourg                Trinidad

Croatia                             Macedonia                   and Tobago

Cyprus                            Malawi                         Tunisia

Czech Republic               Malaysia                      Turkey

Denmark                         Malta                            Turkmenistan

Ecuador                           Mexico                         Ukraine

Egypt                               Moldova                      United Arab

Estonia                            Mongolia                     Emirates

Faroe Islands                   Montenegro                 United Kingdom

Finland                            Morocco                      United States

France                             Netherlands                  Uruguay

Georgia                           New Zealand                Uzbekistan

Germany                         Norway                        Venezuela

Ghana                              Pakistan                       Vietnam

Greece                             Peru                             Zambia

Hong Kong SAR            Peru                             Zimbabwe

Hungary                          Philippines

Types of visas

Since 12 December 2008, Switzerland is an associated member state of the Schengen agreement and accordingly part of the Schengen area. The Schengen regulations apply to the entry and a stay of up to three months that is not subject to authorization. For individuals who are required to hold a visa, Switzerland issues Schengen visas for a stay up to 90 days that are valid for the whole Schengen area.

Foreign nationals require a valid and accepted travel document to enter Switzerland. In addition, a visa is required in certain cases.

Foreign visitors who have entered Switzerland in compliance with the relevant regulations and are not taking up any form of employment (or if the gainful activity performed in Switzerland does not exceed eight days per calendar year) are not required to have a residence permit if the duration of their stay does not exceed three months. Their stay must not exceed a total of 90 days per 180-day period. For the purpose of the computation of this 90-day period, it is in principle necessary to consider all stays in each Schengen state. Individuals requiring a visa must observe the duration of stay specified in their visa.

Foreign nationals intending to take up an employment in Switzerland must apply for a work permit.

Work permits and work authorizations

A foreigner who wants to perform a gainful activity in Switzerland must, in principle, be in possession of an authorization. Any activity (independent activity or dependent employment) that normally procures a gain is considered to be a gainful activity, even if the activity is performed for free or if the remuneration consists only of coverage of basic expenses.

However, in principle, citizens from non-EU/EFTA countries as well as EU/EFTA nationals seconded to Switzerland may work up to eight days in a calendar year in Switzerland without a work permit if the project in Switzerland is planned for a maximum duration of eight days (depending on the nationality, visa require­ments may apply). Every gainful activity exceeding these eight days requires a work permit or authorization. Depending on the sector, this eight-day rule may not apply. For certain sectors, an online announcement or work permit application must be filed by the first day of activity. This rule applies to the following sectors:

  • Construction, civil engineering and sub-trade or construction supply work
  • Hotel and restaurant business
  • Industrial or domestic cleaning
  • Surveillance and security
  • Travel and security
  • Sex industry

Switzerland has a dual system for the admission of foreign work­ers. Gainfully employed nationals from EU/EFTA member states (including all EFTA and EU member states) can benefit from agreements on the free movement of persons if they have entered into a local employment contract in Switzerland. The non-EU/ EFTA workers (foreign nationals), as well as EU/EFTA workers coming to Switzerland under assignment (for more than 90 work­ing days per calendar year), do not benefit from the agreement on the free movement of persons (Accord sur la libre circulation de personnes, or ALCP). The Federal Law on Foreign People (Loi sur les Etrangers, or LEtr) and its ordinance (Ordonnance relative à l’admission, au séjour et à l’exercice d’une activité lucrative, or OASA) govern the procedure for obtaining a work permit.

Although Croatia joined the EU in July 2013, the country has not been included in the ALCP. Consequently, Croatian nationals do not benefit from the free movement of persons, and their admis­sion to Switzerland is governed by the LEtr and its ordinance.

EU/EFTA citizens. EU/EFTA citizens under local employment contracts benefit from the ALCP and, accordingly, are entitled to obtain a work permit. They may perform a gainful activity in Switzerland from the moment their complete work permit appli­cation has been filed with the immigration authorities. Some further requirements (quotas and minimum salary requirements) apply to EU/EFTA citizens seconded to Switzerland.

Non-EU/EFTA citizens. Switzerland immigration policy for for­eign nationals is selective and restrictive in the sense that only a limited number of executives, specialists and other qualified employees are admitted to work in Switzerland. The following significant criteria apply:

  • Foreign nationals may be permitted to work only if it is proven that no suitable domestic employees or citizens of states with which an agreement on the free movement of persons has been concluded can be found for the job. Certain exceptions apply, in particular with respect to seconded foreign employees and international transfers of specialists and executives within a group of companies.
  • Quotas limiting the number of work permits also apply (except for L-4-months/120-days work permits).
  • Foreign nationals may be admitted to work only if the salary and employment conditions customary for the location, profes­sion and sector are satisfied.

Quotas. Swiss law imposes a quota system that limits the number of available permits for foreign nationals, and all EU/EFTA nationals who are seconded to Switzerland for more than four months.

Assignment and cross-border services up to 90 days per calendar year under the ALCP. Employers who are located within the EU/EFTA and who second EU/EFTA nationals (or foreign nationals included in the EU labor market for at least 12 months) for less than 90 (working) days per calendar year must perform an online announcement to comply with Swiss immigration requirements. The 90-day quota is allocated per each foreign legal entity, employee and year. The online announcement is processed online eight days before the beginning of the activity. The online announcement acts as the work permit and no further authorization is required.

Assignment and cross-border services for more than 90 days in Switzerland under the LEtr. For all cases in which the online announcement cannot be used, a work permit is required to sec­ond workers to Switzerland. LEtr governs the work permit requirements. In this case, the requirements mentioned above regarding work permit applications for foreign citizens need to be examined, with exception made of the precedence principle.

Change of employer, change of activity or change of canton. No authorization is required for EU/EFTA citizens to change employers. The same principle applies to foreign nationals hold­ing a long-term B permit except in some particular circumstanc­es. However, authorization is required for the following foreign nationals to change employers:

  • Foreign nationals who receive work permits for a specific time-limited activities
  • Foreign nationals holding a short-term L permit (see Section H)

EU/EFTA nationals holding long-term B permits can freely change from a dependent activity to an independent one.

All EU/EFTA citizens can move their residence to another can­ton. Foreign nationals are required to obtain authorization (which is usually granted) to do so.

Type of permits

Short-term work permits (L permits). One category of short-term work permits (L permits) is the 4-months/120-days permit, which does not fall under the Swiss quota system described above. Under this type of permit, all foreign nationals may take up short-term employment for a maximum of 4 consecutive months, or 120 days, spread throughout the year.

Typically, 4-months/120-days permits are granted to executives or specialists who are needed either once or periodically in Switzerland to perform time-limited tasks. However, Swiss law does not allow a system of rotating employees every 4 months or 120 days (for example, one employee comes for 120 days and is replaced by another, who is then replaced by another). The num­ber of these short-term foreign nationals may not exceed one-fourth of an organization’s total staff.

The second category of L permits is granted for a period between four months and one year and are generally issued for project-related stays or short-term assignments. Such permits are subject to quotas. After one year, the L permit may be extended for another year (24 months maximum in total).

Long-term work permits (B permits). Long-term work permits (B permits) are granted if an employment contract for an undeter­mined duration or for a duration greater than 24 months exists. B permits have a validity of five years for all EU/EFTA nationals and of one year (then two years) for foreign nationals. The B permits are renewable until obtaining the C permit (see below).

Permanent residence permits (C permits). Permanent residence permits (C permits) are available in Switzerland to all foreign nationals who have lived in the country for a time period that varies depending on citizenship and bilateral treaties (five years of residence are required for citizens of most European countries and 10 years for most non-EU citizens).

C permit holders may engage in any legal activity in Switzerland. They may change their employment or profession without approval.

C permits are granted for an unlimited duration, but the permit card must be renewed every five years. The permit lapses if the permit holder gives notice of departure to the municipality’s local registration office, forfeits his or her residence or lives abroad for more than six months. For stays abroad for up to four years, the permit may be frozen if an application is filed in due time.

Family grouping and personal considerations

Family grouping

Family grouping under the ALCP. Family members of EU/EFTA nationals holding a B or L permit (valid for 364 days) are granted an EU/EFTA permit allowing them to join the principal applicant and reside in Switzerland, regardless their nationality (that is, even if they are foreign nationals). The following are family members according to the ALCP:

  • Spouses
  • Children or grandchildren who are under 21 years of age or who financially depend on the applicant
  • Parent(s) and grandparent(s), if they financially depend on the applicant

The spouse and children of an EU/EFTA citizen admitted in Switzerland for the purpose of family grouping are entitled to perform gainful activities in Switzerland regardless of their nationality.

Family grouping under the LEtr. The spouse of the principal beneficiary of a B or L permit and unmarried children who are under 18 years may be admitted to Switzerland for the purpose of family grouping. Family members of permit holders (except B permit and C permit holders) may not undertake employment unless they have been granted permission to do so. The family grouping must be made within five years. For children over 12 years, the family grouping must be made within 12 months.

Marital property regime. Switzerland provides married couples with a choice of the following three marital property regimes:

  • Normal regime, which provides that a property brought into the marriage or received by gift or inheritance during the marriage remains separate property. Other property acquired during the marriage is held in common.
  • Total separation of property, which provides that each spouse remains the owner of his or her property acquired before and during the marriage and that each spouse manages such prop­erty by himself or herself. In that respect, a total separation may be ordered by a judge on the application of one spouse if an important reason exists.
  • Community of property, which provides that both spouses are the owner of any property acquired before and during the mar­riage with the exception of property received by gift or inheri­tance, property intended for the personal use of a spouse, compensation received by a spouse for mental suffering or any property excluded in the marriage contract.

Spouses may elect a regime before marriage and may change regimes during marriage. Election is made by way of a contract. If a couple does not conclude a contract, the normal regime applies.

A married couple may elect in writing to apply one of the follow­ing laws to their marital property:

  • The law of the country where both spouses are resident or will be resident after their marriage
  • The law of the country where one of the spouses is a citizen

If a married couple does not choose the applicable law, one of the following laws applies:

  • The law of the country where both spouses are resident at the same time
  • If they are not resident in the same country, the law of the coun­try where they were most recently resident together
  • If they were never resident together in the same country, the law of their communal country of citizenship
  • If they do not have the same citizenship, the law of the court where the claim is filed

Forced heirship. In Switzerland, a testator may not freely bequeath his or her entire estate. Certain persons, including a surviving spouse, parents and descendants, are forced heirs. A forced heir may waive his or her legal inheritance by executing a written contract with the testator witnessed by a notary public. A forced heir may be disinherited only in limited circumstances (for example, committing a crime against the testator).

The portion of the estate that must be allocated to the forced heirs varies, depending on the relationship of the heir to the deceased and the number of surviving forced heirs.

In general, Swiss law applies to an estate if the testator’s last resi­dence was in Switzerland. However, a testator may choose in his or her will to apply the law of his or her country of citizenship.

Driver’s permits. Foreign nationals may drive legally in Switzer­land with their home country driver’s licenses for up to one year from the date of entry. After that period, if an individual wishes to obtain a Swiss driver’s license, he or she must take a written exam and a driving test, as well as provide certificates regarding a completed eye exam and first-aid training.

Switzerland has driver’s license reciprocity with all EU member countries, European Economic Area countries, Canada, the United States and certain other countries.

Immigration system change

On 9 February 2014, Swiss citizens voted on the popular initia­tive “Stop mass immigration,” calling for a change in immigra­tion policies. Because negotiations between Switzerland and the EU are still in progress, the implementing law has not yet been adopted. As of now, the Federal Council’s proposal is to introduce a Safeguard Clause for EU/EFTA nationals, which would be activated if the immigration threshold limit is exceeded.

In March 2016, the Federal Council signed the Protocol III, which will extend the application of the ALCP to Croatian nationals, and submitted it to the Swiss parliament for approval. The ratification of this protocol will take place only when a solu­tion compatible with ALCP is found.