About Swiss Banking
Swiss taxes are much lower than those of our European neighbors (both for companies and individuals). In comparison with the most countries of the EU and with the USA, where the tax is between 30% and 55% on net income, total taxes in Switzerland amount to approximately 25%. Furthermore, taxes themselves can be deducted from the income as an expense, that results in significantly lower effective tax rate, compared to most other countries where taxes are not deductible.
The Swiss tax system is strongly influenced by the federal structure of the country (the federal corporate income tax rate is 8.5% flat). Each Canton, consequently, has its own tax laws. Tariffs, tax rates, as well as exemptions, remain within the competence of each Canton.
Today, all Cantons can offer tax relief as an incentive to attract foreign companies, as well as to encourage the start-up of new companies. Switzerland, as a business location, is therefore also attractive from a tax viewpoint.
Tax Brackets in Switzerland
Personal income tax is progressive in nature. The total rate does not usually exceed 30%.
The Swiss Federal Tax Administration website provides a broad outline of the Swiss tax system, and full details and tax tables are available in PDF documents.
The complexity of the system is partly due to the fact that the Confederation, the 26 Cantons that make up the federation, and about 2 900 communes [municipalities] levy their own taxes based on the Federal Constitution and 26 Cantonal Constitutions.
With the additional levies, the total tax rate is often in excess of 55%-60% at its highest bracket.