Switzerland specific
Kirsten Simmons avatar
Written by Kirsten Simmons
Updated over a week ago

TFX specializes in top-tier U.S. tax services for individuals, partnerships, corporations, trusts, and estates worldwide. If you need assistance with your Swiss tax return, we have got you covered. We maintain strong partnerships with trusted local tax experts in 193 countries. These professionals are well-equipped to handle your non-U.S. tax needs. Reach out to us via phone, chat, or email, and we will connect you with an experienced local firm. Your global tax compliance just got simpler with TFX.

Table of contents:

Swiss tax glossary

Allocations familiales / Familienzulagen

Family allowances are various federal and cantonal allowances for children, education, birth, and adoption. They are not included in U.S. taxable income.

Assurances sociales / Sozialversicherungen

Social Insurance: The basic pension insurance and taxable income in Switzerland and the United States are subject to the Foreign Tax Credit (FTC) to eliminate double taxation. Report it in the Income > Passive Income > Pension section of our Tax Questionnaire.

Сertificat de salaire / Lohnausweis

The salary statement is used throughout Switzerland to provide information about income and expenses received. Main document required for preparation of U.S. tax return for expats employed in Switzerland.

Choix du nom de famille / Namenswahl bei Heirat

Choosing your name after marriage: Regardless of the family name used on Swiss documents, you must provide your family name in the Personal Details > The Basics section of our Tax Questionnaire as shown on your U.S. Social Security card until you officially change your name with the U.S. Social Security Administration.

Imposition des successions / Besteuerung von Erbschaften

Taxation on Inheritance: Cantons may impose taxes on the person who inherits an estate. There is no U.S. federal taxation on inheritances, whether they are from the U.S. or abroad. However, U.S. inheritance may be subject to state-level taxes in certain cases.

  • Report inheritance in the Income > Other Income section of our Tax Questionnaire, the question During the tax year, did you receive inheritance or gifts from a non-U.S. person?

  • Report inheritance taxes paid in the Taxes and Deductions > Deductions section, the question Did you pay an Inheritance Tax?

2e Pilier / Die 2. Säule

Pillar 2 - Occupational Pension Provision. Employer contributions to Pillar 2 are included in the calculation of the U.S. annual taxable income of the employee. Report it in the Income > Wages section of our Tax Questionnaire. 

3e Pilier / Die 3. Säule

Pillar 3 - Individual Pension Provisions. Contributions to Pillar 3 are not deductible from the U.S. annual income. Still, distributions are treated on U.S. tax returns as the payout from the regular investment made with the previously taxed money (only growth is taxable). The balance of Pillar 3 in the Non-US Financial Accounts section of the Tax Questionnaire is reportable on FBAR/FATCA. Click the Configure Life & Income button and click Yes next to the statement I have financial accounts outside the U.S. to make the Non-US Financial Accounts section appear.

Note: contributions are not reportable annually - only balance.

Revenu gagné / Erwerbseinkünfte

Income earned from gainful employment.

Impôt foncier / Liegenschaftssteuer

Property tax, sometimes known as land or real estate tax, is a cantonal or communal tax on land and buildings. It is calculated on the total taxable value of the property, i.e., without taking into account any related debts or mortgages.

❗ Important note: property tax on foreign residence deduction was suspended through 2025.

  • If you own the property, report property taxes in the Taxes And Deductions > Deductions section of our Tax Questionnaire, questions Did you own residential real estate during the tax year? > Did you pay property taxes on the residence?

  • If the property was rented out, report taxes on rental income in the Income > Passive Income > Rental Income section of the Tax Questionnaire, questions Did you pay non-U.S. tax on rental income? > How much tax other than income tax did you pay (property taxes, etc.)?

Impôt sur les gains immobiliers / Grundstückgewinnsteuer

Tax on gains from the selling of property. In Switzerland, a profit made on the sale of the property is either subject to a special tax (property gains tax) or should be declared ordinary income. In the U.S., tax on gains from the sale of the property may be treated as long-term or short-term profits and, in certain cases, may be tax-exempt.

Report in the Taxes and Deductions > Taxes  Paid section, the question Did you pay any tax to a non-U.S. country on the sale of any capital assets (stock, mutual funds, cryptocurrency, real property, etc.)?

Impôt sur la fortune immobilière / Vermögenssteuer auf Liegenschaften

The wealth tax on the value of real estate property is not allowed as a Foreign Tax Credit (FTC) but can be deducted as a part of itemized deductions on U.S. tax returns. Report it in the Taxes And Deductions > Deductions section of our Tax Questionnaire.

Impôt sur le revenu / Einkommenssteuer zur Verfügung

Income Tax: The foreign income tax (federal and cantonal) can be utilized as a Foreign Tax Credit to offset U.S. tax liability. Report tax imposed on the particular income type in the Taxes And Deductions > Taxes Paid section of our Tax Questionnaire.

Pension alimentaire / Unterhalt Aufcommen

Spousal support, Alimony: Deductible from taxable income by the spouse paying alimony. Please report it in the Income > Other Income section of our Tax Questionnaire, the question Did you pay or receive Alimony during the tax year?

Impôt d'église /  Kirchensteuern

Church tax is not considered a cantonal tax, although it is collected by the cantons. It is explicitly excluded from qualification for the Foreign Tax Credit (FTC). The reason is that you must register your religion as Catholic to be subject to this levy. In other words, paying this tax is voluntary, and you cannot deduct FTC contributions made to any religious organizations.

Social Security and pensions

The Swiss Social Security system comprises three pillars:

  • Pillar 1 - Mandatory Old-age and Survivors Insurance (AHV/IV/EO, AVS/AI/APG): It provides basic financial security to individuals in the event of old age, disability, or the loss of a breadwinner. It also offers survivor benefits to eligible family members in case of the insured person's death. Contributions are made by both employees and employers. The benefits cover essential living expenses and are adjusted annually based on the cost of living.

  • Pillar 2 - Mandatory occupational pension plans (LPP/BVG): It covers individuals who earn above a certain income threshold and work at least 20 hours per week for the same employer. Contributions are made jointly by employees and employers. The benefits are typically paid out as a lump sum or annuity during retirement and may also include disability and survivor benefits. The exact benefits depend on the accumulated savings in the individual's pension fund.

  • Pillar 3 - Voluntary private savings and insurance (Pillar 3a and 3b): It allows individuals to build personal savings and invest in various financial instruments, including life insurance policies and retirement savings accounts. The benefits can be used for retirement income, purchasing real estate, or other financial needs. Participation in Pillar 3 is optional, and individuals can choose from two sub-pillars: Pillar 3a, which provides tax advantages and is designed for retirement savings, and Pillar 3b, which offers more flexibility for various financial goals.

Note: contributions to the Swiss Social Insurance system withheld from your paycheck or made on self-employment income are not deductible from the U.S. taxable income. They do not qualify for the foreign-earned income credit.

Switzerland - U.S. Social Security Totalization Agreement

A bilateral agreement between the United States and Switzerland improves Social Security protection for people who work or have worked in both countries. It helps people who, without the agreement, would not be eligible for retirement, disability, or survivor benefits under the Social Security system of one or both countries. It also helps many people who would otherwise have to pay Social Security taxes to both countries on the same earnings.

The agreement's provisions eliminate double Social Security taxation and permit dual residents to use their work in both countries to qualify for benefits.

  • If you are self-employed, contributions to the Social Insurance system make you exempt from contributions to the U.S. Social Security system that otherwise would be required in the U.S. on self-employment income.

  • If you have Social Security credits in both the United States and Switzerland, you may be eligible for benefits from one or both countries. If you meet all the basic requirements under one country's system, you will get a regular benefit from that country. If you do not have enough work credits under the U.S. system to qualify for standard benefits, you may be able to qualify for a partial benefit from the United States based on both U.S. and Swiss credits. To be eligible to have your Swiss credits counted, you must have earned at least six credits under the U.S. system.

    Note: although the agreement allows the Social Security Administration to qualify for US retirement, disability, or survivor benefits, the agreement doesn't cover Medicare benefits.

Taxation of Social Security benefits

  • U.S. Social Security benefits paid to Swiss residents: The U.S., as the source country, subjects up to 85 percent of the benefits paid to U.S. citizens residing in Switzerland for taxation. As the residence country, Switzerland also subjects the U.S. benefits received by those individuals to taxation. Foreign tax credit relief can be applied only on the U.S. side.

  • Swiss Social Security benefits paid to U.S. residents: No special double taxation relief rule is required in the reverse situation where Swiss Social Security benefits are paid to U.S. residents because Switzerland does not tax the benefits when it is the source country.

  • Contributions to employer pension schemes: When a U.S. citizen/Green Card holder is a participant in the Pillar 2 pension plan, contributions paid by or on behalf of that individual to the pension scheme may not be excluded in computing his U.S. taxable income. Employer contributions are added to gross annual wages to calculate taxable earned income.

  • Pension benefits and similar remunerations paid to U.S. citizens/Green Card holders in Switzerland are taxable in both countries. However, you can eliminate the burden of double taxation. Taxes paid in Switzerland on pension income are applied as a foreign tax credit against tax owed on the same income in the U.S.

Extension of treaty benefits through the Non-Discrimination Clause

Article 24 of the U.S. - Switzerland Tax Treaty requires the United States to grant national treatment to residents and citizens of Switzerland, even if that person is a citizen of the United States. Specifically, the application of the Non-Discrimination Clause allows deferral of income earned in pension funds through the time when benefits are paid, although, in the absence of the non-discrimination clause, income in pension funds earned by U.S. tax residents must be included in U.S. annual taxable income.

Tie-breaker rule to apply for treaty benefits

U.S. Green Card holders residing in Switzerland may elect to apply what is known as the tie-breaker rule of the U.S. - Switzerland Tax Treaty and be deemed a resident only of the State (i.e., country) with which their personal and economic relations are closer (Switzerland).

Under such an election, the individual would file Form 1040NR and report only income derived from U.S. sources. The requirement to provide full disclosure of foreign bank accounts remains, and the tax on income from U.S. sources will be higher than the tax on the same income when applied to U.S. residents filing Form 1040.

Moreover, the person would be treated as a U.S. resident for U.S. tax purposes other than determining the individual's U.S. tax liability. For example, in determining whether a foreign corporation is a controlled foreign corporation, shares in that corporation held by the individual would be considered to be owned by a U.S. resident, and Form 5471 information return concerning certain foreign corporations will be required.

Your Swiss pension will not be double taxed

When you start receiving pension distributions, your monthly benefit will consist of taxable and non-taxable portions. The central non-taxable portion is all of your contributions that have not been deducted from taxable income in the U.S. In addition, employer contributions that have been reported on your U.S. tax return will be a part of the non-taxable portion. All this taken together will make up the "cost" of the pension.

The taxable portion will be calculated using an IRS calculator that takes into account your pension cost and your age when you receive the benefits. This is not a simple calculation, but after it is done once, it will be easy to continue in subsequent years.

Tax treaties with some countries provide a much simpler way of calculating the taxable portion: for example, 25% of the U.K. pension distributions are non-taxable in the U.S.

Swiss income reporting

Gross salary or wages

Report your gross salary shown on line 8 of the Certificat de Salaire. Separately report the number of employer contributions to Pillar 2. Generally, the amount of your employer contributions to Pillar 2 is equal to your Regular Contributions shown on line 10.1 of the Certificat de Salaire. If you had more than one employer over the year, add amounts from both Certificates.

To report the total amount of the annual gross salary:

  1. Open your Tax Questionnaire and click the Configure Life & Income button on the left side.

  2. Click Yes next to I receive payments from an employer.

  3. Click Next Step and Submit.

  4. Navigate to Income > Wages and click Yes to the question Did you receive payments during the tax year from a non-U.S. Employer?

  5. Enter the gross salary amount to the question Gross wages/salary earned with this employer during the tax year? Use the income calculator to convert to a calendar year.

Income from self-employment

Income from self-employment is a turnover of your unincorporated business. To report it, navigate to Income > Self-employment and enter the amount under the question Gross Income from the Self-employment.

Note: income is reported as the gross amount before any deductions allowed in Switzerland, e.g., before contributions to Pillar 1; those are reported separately.

Severance or redundancy pay

If you received severance or redundancy pay, add the gross amount to the annual gross salary.

Report other types of income such as workplace pension, state pension on Income > Passive Income > Pension and alimony, royalties, and unemployment on the respective lines of Income > Other Income.

Income tax

Similarly to income, the tax must be reported separately for each type of income on which tax was paid. The base amount of income tax withheld from wages is shown on line 12 of the Certificat de Salaire. 

If there was additional tax payment during the calendar year, for example, the paid tax bill for federal or cantonal taxes on income earned this or the previous year, add that amount to tax withheld from wages.

To report tax imposed on the particular income type:

  1. Open your Tax Questionnaire and navigate to Taxes And Deductions > Taxes Paid.

  2. Click Yes under the question Did you pay any tax to any non-U.S. country on any of your income this year?

  3. Enter the amounts and set the tax types.

The payor may withhold taxes on unearned income, e.g., a bank withheld income tax from dividends, or you may owe tax upon completing the tax assessment form. Report each type of tax paid during the filing year in the respective section of our Questionnaire, even if it applies to income received in prior years.

Wealth tax

Wealth tax is not a part of income tax. It can be deducted on your U.S. tax return as a part of itemized deductions. 

To report this tax:

  1. Open your Tax Questionnaire and click the Configure Life & Income button on the left side.

  2. Click Yes next to I want to maximize deductions.

  3. Click Next Step and Submit.

  4. Navigate to Taxes And Deductions > Deductions and click Yes under the question Do you want to list various expenses that might improve your tax position?

  5. Click Yes under the question Did you pay a Wealth Tax (i.e. tax on assets and not income)?

  6. Provide details and the amount.


We will take specific deductions allowed for Swiss residents by the U.S. - Switzerland Tax Treaty. For example, Swiss residents who remain in the United States long enough to become tax residents under the U.S. internal law but do not acquire permanent residence status, i.e., they do not become Green Card holders, will qualify for various tax exemption benefits if they conflict with the Internal Revenue Code rules.

Further, the Taxes And Deductions > Deductions section of the TQ offers you questions related to various additional deductions. Such deductions include mortgage interest, alimony payments, and investment advisor fees. The U.S. tax system applies a concept of "Standard deduction": $12,950 per single person and $25,900 for the married couple for the 2022 tax year. For most Swiss residents filing a U.S. tax return standard deduction option is more tax efficient than "itemized deductions" - grossing up individual deductions. Refer to Standard vs. Itemized deduction on the U.S. tax return for more information.

Pension contributions

To report employer contributions and your contributions to the pension scheme (Pillar 2):

  1. Open your Tax Questionnaire and navigate to Income > Wages.

  2. Click Yes under the question Did you receive payments during the tax year from a non-U.S. Employer?

  3. Click Yes under the question Were contributions made to a non-U.S. pension plan (whether yourself or by your employer)?

  4. Click Yes under the question Did your employer contribute to your pension plan?

  5. Provide the amount and indicate the currency.

Pension payouts

To report payouts from foreign pensions of all types: Social Security, Occupational Pension:

  1. Open your Tax Questionnaire and click the Configure Life & Income button on the left side.

  2. Click Yes next to I have retirement accounts or receive retirement income.

  3. Click Next Step and Submit.

  4. Navigate to Income > Passive Income > Pension.

  5. Click Yes under the question Did you receive Foreign (i.e., non-U.S.) retirement distributions?

  6. Fill in the table Country & Pension Type.

Note: if you have not received your AHV tax certificate, please request one at your cantonal Compensation office.

Interest, dividends and distributions from Pillar 3 accounts

Report distributions from Pillar 3 accounts as income from regular investment. From the IRS perspective, contributions to Pillar 3 were made from after-tax funds. Therefore only growth in history is subject to tax.

  1. Open your Tax Questionnaire and click the Configure Life & Income button on the left side.

  2. Click Yes next to I have investments.

  3. Click Next Step and Submit.

  4. Navigate to Income > Investments and click Yes under the question Did you sell any type of securities during the tax year?

  5. Click Yes under the question Do you have investments in non-U.S. pooled investment funds? and upload annual statements for the last 3 years in which the fund was held (showing year-end balance).

Report interest as if you received it from the bank or brokerage account:

  1. Navigate to Income > Passive Income and select Yes under the statement I earn interest.

  2. Click on the Interest tab at the top and click Yes under the question Did you receive non-U.S. interest income?

  3. Fill in the table.

Report dividends as if you received them from the bank or brokerage account:

  1. Navigate to Income > Passive Income and select Yes under the statement I earn dividends.

  2. Click on the Dividends tab at the top and click Yes under the question Did you receive non-U.S. dividends?

  3. Fill in the table.

Q: My taxes are automatically taken out of my Swiss salary, and I have a deduction taken out for contributions to AVS (Basic Pension Insurance). Do I add these together for my income tax?

A: Contributions to AVS and other components of Pillar 1 (AHV/IV/EO, AVS/AI/APG) are not deductible. Likewise, you do not "deduct" income tax. We need to report gross salary and then take the foreign tax credit for income tax (not for the contributions to Pillar 1).

Another example of non-deductible taxes is VAT.

Switzerland - U.S. FATCA Treaty overview

The Foreign Account Tax Compliance Act (FATCA) is a piece of legislation introduced by the United States government in 2010 to avoid double taxation and prevent fiscal evasion concerning taxes, allowing the exchange of tax-related information.

There are two FATCA model types.

  • Model 1, chosen by most European countries, is based on the principle of automatic exchange of information. Financial institutions provide details of all capital subject to US tax to their local authorities, who pass these details on to the IRS.

  • Model 2, according to which Washington is supplied with information directly by the financial institutions – but this only concerns capital held by American customers who consent to their details being released.

The Swiss Parliament has chosen the Model 2 type. For customers who do not consent to this, the financial institutions must tell the IRS the number and the total value of these accounts. The IRS can then request "administrative assistance" from the Swiss government to get the full details.

To comply with U.S. FATCA regulations, Swiss financial institutions search their data for indications (indicia) that an account holder may be a U.S. person (U.S. Specified Persons or foreign entities in which U.S. taxpayers hold a substantial ownership interest). These indications include:

  • U.S. citizenship (evidenced by a U.S. passport or Green Card).

  • U.S. residential address.

  • Place of birth in the U.S.

  • U.S. telephone number.

  • Standing instructions to transfer funds to a U.S. bank account.

  • Power of attorney (PoA) or third-party authority in favor of a person with a U.S. address.

  • Use of a c/o or hold mail address.

Swiss financial accounts reporting

Which Swiss financial accounts must the U.S. individual report on FBAR / FATCA?

  • Individual bank accounts such as savings accounts, checking accounts, and time deposits.

  • Retirement accounts (balance on Pillar 2 and Pillar 3 accounts).

  • Brokerage accounts, commodity futures, or options accounts.

  • Insurance policies and annuity contracts with a cash value.

  • Business accounts where a U.S. person has a greater than 50 percent interest in the entity.

Which types of Swiss financial assets are not required to be reported on FBAR / FATCA?

Specific entities are exempt or deemed FATCA compliant because they present a low risk of being used by U.S. persons to evade U.S. taxes. Such entities/financial products include vested benefits insurance under Swiss law, restricted pension plan insurance (Pillar 3a), certain employer-funded welfare funds, and particular investment foundations.

Even though specific retirement plans are exempt from direct FATCA reporting, the FATCA rules applying to individuals were not relaxed. Form 8938 requires reporting by U.S. taxpayers participating in foreign pension plans.

Swiss financial assets exempt from FBAR/FATCA reporting are limited to Social Insurance (Pillar 1), Real Estate Holding, precious metals held directly, and collectibles.

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