Overview of the Swiss tax system

The Swiss tax system mirrors Switzerland’s federal structure, which consists of 26 sovereign cantons with approximately 2,650 independent municipalities. Based on the constitution, all cantons have the full right of taxation except for those taxes that are exclusively reserved for the federal government. As a consequence, Switzerland has two levels of taxation – the federal and the cantonal/communal level.

The accomplished reform of the income tax system in recent years provided for harmonization of the formal aspects of the various cantonal tax laws – for example, determination of taxable income, deductions, tax periods, assessment
procedures, etc. The cantons/communes have however still significant autonomy for the quantitative aspects of taxation, particularly with respect to determining the applicable tax rates. Therefore, the tax burden still considerably differs
between cantons/communes.