As a result of the three levels of government (federal, cantonal and municipal), there are three corresponding taxes: federal, cantonal and municipal.

Federal tax law is standard throughout Switzerland. Cantonal and municipal taxes can vary considerably among the different cantons. Municipal taxes are levied as a multiple of cantonal taxes vary from district to district. 

Switzerland offers one of the lowest rates of taxation and social security contributions of all the industrialized countries.

Double Taxation Conventions with over 70 Countries

To prevent or alleviate the effects of double taxation in Switzerland and abroad, Switzerland has executed over 70 double taxation conventions, which largely follow the OECD specimen treaty.

To benefit from a reduced treaty-withholding rate, the foreign recipient must generally apply to the Swiss tax authorities for a refund. However, a special agreement with the United States provides a direct reduction at source to the treaty rate of 5% under certain conditions.

Lowest Value Added Tax in Europe

As with other indirect taxes and duties on consumption, the VAT can be levied only by the Confederation. To reduce administrative requirements, very small companies are exempt from VAT, and certain goods and services are exempt as well.

As the emphasis is on direct taxes, the VAT rate is a maximum of only 7.6%, making it the lowest VAT burden in all of Europe.

There are no exchange controls. Every currency is free for trade.