U.S. expat taxes in Switzerland
As a U.S. citizen or green card holder living in Switzerland, taking care of your U.S. taxes can feel like a complicated task. Knowing which tax rules affect you and understanding your options is a lot to stay on top of.
With H&R Block, you can rest easy knowing you’ve found the right expertise for U.S. expat taxes in Switzerland. Our seasoned tax pros make filing simple and secure. Whether you need expat tax guidance on filing from abroad or information on FATCA and FBAR rules, we’re here to help.
What Americans moving to Switzerland should know
For starters, Americans and U.S. green card holders living in Switzerland should continue to file a U.S. tax return each year. However, filing while abroad comes with new considerations and questions. “Do I have additional information to report to the IRS? How do my Swiss financial accounts affect my filing? What options do I have to reduce my tax bill?”
We’ve outlined a few tax considerations for U.S. citizens working in Switzerland, so you know what affects the tax you pay and which forms you need to file. Of course, tax rules for U.S. expats go beyond what we’ve listed below.
Need help? Our experienced tax advisors have seen it all and are here for you when you’re ready to tackle your taxes.
U.S. Expat Tax Filing Considerations
Living as an American in Switzerland can affect your taxes even if you don’t stay for very long. For example, if you earn income while on a short-term assignment, you’ll need to report that income on your U.S. taxes. As you establish deeper financial roots in Switzerland, you’ll have more considerations for your American tax filing.
You may need to report your Swiss financial accounts and assets. Generally, U.S. taxpayers with more than $10,000 in foreign bank or financial accounts are subject to FBAR filing and reporting requirements. You may also be subject to FATCA reporting requirements if you have assets valued at $200,000 and higher.
You can lower your U.S. bill and avoid dual taxation with certain tax strategies. Expats may take advantage of one of two options, detailed below, to lower their taxes.
- The foreign earned income exclusion allows you to exclude your wages from your U.S. taxes. This option is available to those who meet certain time-based residency requirements.
- The foreign tax credit lets you claim a credit for income taxes paid to a foreign government.
Your total Swiss tax rate – combining federal, cantonal and municipal taxes – will help determine which option is the best for you as an American living in Switzerland. You can rely on your H&R Block tax advisor to confirm the best path for you.
Your Swiss pension accounts are not tax-free in the United States. If you have a Swiss Pillar II or Pillar III pension, they aren’t treated like U.S. retirement accounts, such as a 401(k) or an IRA.
Pillar II pensions – When your employer contributes to your Pillar II pension, those contributions are included in your U.S. taxable income as a U.S. Expat in Switzerland. Your Pillar II account may be subject to FBAR and FATCA reporting depending on the value of your account.
When it’s time to make withdrawals from your Swiss pension, any amount above the original contributions are taxable. It’s smart to keep good records of your contributions and earnings in case the IRS has any questions.
Pillar III pensions – If you invest for your retirement through this type of private pension, the income it generates is taxable, even though it stays inside the pension. Additionally, these accounts may be subject to FATCA, foreign trust or PFIC reporting depending on the investment type and value of your account.
Swiss Tax Filing Considerations
Your Swiss income taxes are based on your residency status. Swiss tax residents are taxed on all income, regardless of where it’s earned. Swiss nonresidents are only taxed on Swiss-sourced income.
When do you become a Swiss tax resident? According to Swiss law, it’s when you have the intention to permanently establish an abode in Switzerland. You can also be a tax resident if you’re an American working in Switzerland for 30 consecutive days or more, or if you’re there for at least 90 days, even if you’re not working.
The federal income tax rates range from 0% to 11.5%, but local taxes also apply. Similar to taxes in the U.S., the percentage of tax that you pay increases as your income increases into different brackets. While the federal tax rates are lower than American tax brackets, it’s important to remember that cantonal and, in some places, municipal taxes apply. Cantonal tax rates can vary widely, meaning some Americans living in Switzerland may pay a higher tax rate than in the U.S.
With this in mind, you should look at your entire Swiss tax picture to determine the better option for lowering your tax bill: either the foreign earned income exclusion or foreign tax credit. One of our experienced tax advisors can guide you to determine the best choice for you.
2019 Tax Rates for Single taxpayers
|Tax Rate||Taxable income|
|0%||SF 0 – 14,500|
|0.77%||SF 14,501 – SF 31,600|
|SF 131.65 plus 0.88%||SF 31,601 – SF 41,400|
|SF 217.90 plus 2.64%||SF 41,401 – SF 55,200|
|SF 582.20 plus 2.97%||SF 55,201 – SF 72,500|
|SF 1,096.0 plus 5.94%||SF 72,501 – SF 78,100|
|SF 1,428.60 plus 6.60%||SF 78,101 – SF 103,600|
|SF 3,111.60 plus 8.80%||SF 103,601 – SF 134,600|
|SF 5,839.60 plus 11.00%||SF 134,601 – SF 176,000|
|SF 10,393.60 plus 13.20%||SF 176,001 – SF 755,200|
|SF 86,848 plus 11.50%||SF 755,201 –|
2019 Tax Rates for Married taxpayers and single taxpayers with minor children
|Tax Rate||Taxable income|
|0% SF||0 – SF 28,300|
|1.00%||SF 28,301 – SF 50,900|
|SF 226 plus 2.00%||SF 50,901 – SF 58,400|
|SF 376 plus 3.00%||SF 58,401 – SF 75,300|
|SF 883 plus 4.00%||SF 75,301 – SF 90,300|
|SF 1,483 plus 5.00%||SF 90,301 – SF 103,400|
|SF 2,138 plus 6.00%||SF 103,401 – SF 114,700|
|SF 2,816 plus 7.00%||SF 114,71 – SF 124,200|
|SF 3,4381 plus 8.00%||SF 124,201 – SF 131,700|
|SF 4, 081 plus 9.00%||SF 131,701 – SF 137,300|
|SF 4,585 plus 10.00%||SF 137,301 – SF 141,200|
|SF 4,975 plus 11.00||SF 141,201 – SF 143,100|
|SF 5,184 plus 12.00||SF 143,101 – SF 145,000|
|SF 5,412 plus 13.00||SF 145,001 – SF 895,900|
|SF 103,040 plus 11.50||SF 895,901 -|
The Swiss tax filing season is similar to that of the U.S., but with a few differences. Switzerland taxes follow a January to December tax year. Tax returns are due March 31 and the extension deadlines are at the end of June, September or November, depending on your canton of residency.
How H&R Block can help Americans living in Switzerland
Our highly trained experts have helped thousands of Americans as they file their U.S. expat taxes in Switzerland. You can trust our expertise and guidance to help you determine the best tax strategies for you.
Start your expat taxes for free today!