U.S. Expat Taxes in Switzerland
6 min read
October 26, 2022
October 26, 2022
At a glance
Check out these tax tips for filing taxes in Switzerland. H&R Block’s tax experts provide essential advice for U.S. Expats.
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. Whether you need expat tax guidance on filing from abroad or information on FATCA and FBAR rules, we’re here to help.
Ready to file your expat taxes? We’ve got a tax solution for you—whether you want to DIY your expat taxes or leave it to one of our experienced Tax Advisors. Head on over to our Ways to File page to choose your journey and get started.
What U.S. citizens working in Switzerland should know about U.S. expat taxes
Filing U.S. expat taxes in Switzerland comes with new considerations and questions: “Do I have additional information to report to the IRS? How do my Swiss bank accounts affect my filing? What options do I have to reduce my tax bill?”
For starters, Americans and U.S. Green Card holders living in Switzerland should continue to file a U.S. tax return each year.
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.
I’m retiring to Switzerland. What do I need to know about U.S. taxes?
If retiring in the Swiss mountains is your long-term goal, you should first understand how taxes work when retiring abroad. Even if you retire abroad you still may have to file a U.S. tax return. You’ll also still have to report money in any foreign financial accounts on your FBAR if you meet the requirements.
You should know 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.
Switzerland tax filing considerations for U.S. citizens
As an American living in Switzerland, you may have to pay Swiss taxes. Here at H&R Block, we dedicate our expertise to U.S. taxes. If you have questions specific to your Switzerland tax return, it’s best to speak to an expert on local Swiss taxes.
In general, Switzerland 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.
2022-2023 Tax Rates for Single Taxpayers
|Tax Rate||Taxable Income|
|0%||CHF 0 – 14,500|
|0.77%||CHF 14,501 – CHF 31,600|
|CHF 131.65 plus 0.88%||CHF 31,601 – CHF 41,400|
|CHF 217.90 plus 2.64%||CHF 41,401 – CHF 55,200|
|CHF 582.20 plus 2.97%||CHF 55,201 – CHF 72,500|
|CHF 1,096.0 plus 5.94%||CHF 72,501 – CHF 78,100|
|CHF 1,428.60 plus 6.60%||CHF 78,101 – CHF 103,600|
|CHF 3,111.60 plus 8.80%||CHF 103,601 – CHF 134,600|
|CHF 5,839.60 plus 11.00%||CHF 134,601 – CHF 176,000|
|CHF 10,393.60 plus 13.20%||CHF 176,001 – CHF 755,200|
|CHF 86,848 plus 11.50%||CHF 755,201 –|
2022-2023 Tax Rates for Married Taxpayers and Single Taxpayers with Minor Children
|Tax Rate||Taxable Income|
|0% CHF||0 – CHF 28,300|
|1.00%||CHF 28,301 – CHF 50,900|
|CHF 226 plus 2.00%||CHF 50,901 – CHF 58,400|
|CHF 376 plus 3.00%||CHF 58,401 – CHF 75,300|
|CHF 883 plus 4.00%||CHF 75,301 – CHF 90,300|
|CHF 1,483 plus 5.00%||CHF 90,301 – CHF 103,400|
|CHF 2,138 plus 6.00%||CHF 103,401 – CHF 114,700|
|CHF 2,816 plus 7.00%||CHF 114,71 – CHF 124,200|
|CHF 3,4381 plus 8.00%||CHF 124,201 – CHF 131,700|
|CHF 4, 081 plus 9.00%||CHF 131,701 – CHF 137,300|
|CHF 4,585 plus 10.00%||CHF 137,301 – CHF 141,200|
|CHF 4,975 plus 11.00||CHF 141,201 – CHF 143,100|
|CHF 5,184 plus 12.00||CHF 143,101 – CHF 145,000|
|CHF 5,412 plus 13.00||CHF 145,001 – CHF 895,900|
|CHF 103,040 plus 11.50||CHF 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 to file U.S. taxes from Switzerland
Need to file U.S. taxes from Switzerland? Here’s how to file your U.S. expat taxes online:
- Head on over to our Ways to File page
- Pick your journey—in the driver’s seat with our online DIY tool or letting a Tax Advisor take the wheel.
- Once you’re through your chosen journey, you review your return and pay
- We file your return with the IRS
- You sit back knowing your taxes were done right
Need U.S. tax preparation in Switzerland? H&R Block is here to help.
Are you a U.S. citizen living in Switzerland? H&R Block Expat Tax Services is here to help you get your U.S. taxes in order. With multiple ways to file, we’ve got a tax solution for you. Get started with our made-for-expats online expat tax services today!
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