Taxes and finances in Switzerland: A guide for emigrants | KOCH Moving Logistics

Moving to Switzerland is an exciting adventure that offers many new opportunities and experiences. One essential aspect that emigrants must consider is taxes and finances in Switzerland. This article provides comprehensive information about the Swiss tax system, the best banks and tips for international money transfers for anyone wishing to emigrate to Switzerland.

The Swiss tax system is moderate and attractive by international comparison, but is also considered extremely complex. It operates on three levels: federal, cantonal and municipal. This three‑tier structure leads to significant differences in tax burden between cantons, making tax optimisationthe most critical factor when choosing a place of residence. The reason for this is that around 80% of total direct taxes are levied at the cantonal and municipal levels. Moving from one canton to another (e.g., from Bern to Zug) can therefore dramatically change your tax burden.

The most important types of tax for individuals are:

 

– Income tax: It is progressive – the higher your income, the higher the tax rate. Your worldwide income is taxed once you are tax‑resident in Switzerland.

 

– Wealth tax: Unlike in Germany, Switzerland also taxes your net wealth (assets minus liabilities) in addition to your income. The tax rate is comparatively low but can vary depending on the canton.

 

– Value Added Tax (VAT): The current rates are 8,1 % (standard rate), 2.6% (reduced rate, e.g., for food) and 3.8% (for accommodation services). By comparison, the standard rate in Germany is 19%.

If you work in Switzerland as a German citizen with a B residence permit (and without a C settlement permit), you are generally subject to withholding tax (Quellensteuer). This means that your employer deducts the tax directly from your gross salary and pays it to the cantonal tax office. The exact rates vary depending on the canton, marital status, number of children and religion. New withholding tax rates have been calculated for 2026.

Withholding tax obligation ends when you obtain a C settlement permit or when you are married to a person with Swiss citizenship or a C permit. From then on, you are subject to ordinary assessment. Switching from withholding tax to subsequent ordinary assessment (NOV) can be tax‑advantageous, as deductions (e.g., for professional expenses, insurance or pension contributions) can then be claimed.

Current change for expatriates: From 2026, expense regulations must comply with the SSK model templates in terms of content. Special rules also apply to the deductibility of special professional expenses, such as for moves or trips home, for skilled workers temporarily posted to Switzerland.

A double taxation agreement (DTA) exists between Germany and Switzerland, which preventsyour income and assets from being taxed in both countries. The amending protocol to the DTA entered into force on 27 November 2025,with most changes applying from 1 January 2026.

The amended agreement implements, among other things, the minimum standards of the OECD BEPS project to combat tax avoidance and contains an anti‑abuse clause. It does not provide for any significant changes in the allocation of taxing rights between Switzerland and Germany with regard to Swiss practice, but improves legal certainty and cooperation. Extensive changes have been made to the details of cross‑border commuter issues; a regular return to the place of residence only exists when the employee travels from their residence to their place of work and back on at least 20% of working days in the calendar year. Nevertheless, it is advisable to seek tax advice in advance in order to make optimal use of the benefits of this agreement.

Opening a bank account in Switzerland is an essential step to establishing yourself in the Swiss economy. Over 95% of Swiss employers require a local account for salary payments. In addition, the Swiss payment system is based on QR invoices, which most foreign institutes cannot process.

 

To open an account, you generally need:

 

– A valid passport or identity card

– Your residence permit (B or C permit)

– Proof of your address in Switzerland

 

The best‑known banks in Switzerland include UBS (after the full integration of Credit Suisse), Zurich Cantonal Bank (ZKB), the Migros Bank , and regional cantonal banks.

Please note: For customers residing outside Switzerland, some banks charge a monthly surcharge of between 10 CHF and 30 CHF due to international compliance requirements. It is therefore worth comparing fee structures in advance.

International money transfers can be complex and expensive. For emigrants who need to transfer money regularly between Switzerland and Germany, there are several ways to minimise costs:

 

– Wise (formerly TransferWise): Offers fast transfers at fair exchange rates with transparent fees.

– PayPalSimple and fast, but often higher fees than specialised services.

– Classic bank transfers (SWIFT): Usually expensive and slow – generally not recommended for regular transfers.

 

Using online platforms to compare exchange rates can also help you find the best option. For larger amounts (e.g., when buying a property), it is advisable to consult with a specialist currency transfer advisor.

Planning for old age is another important aspect for emigrants working in Switzerland. Switzerland has a unique three‑pillar system:

 

– 1st pillar (AHV/IV): State old‑age and survivors' insurance. Mandatory for all residents. Secures the minimum subsistence level.

 

– 2nd pillar (BVG): Occupational pension scheme. Mandatory for employees with an annual salary of over 22,050 CHF (as of 2026). Employees and employers contribute jointly.

 

– 3rd pillar (pillar 3a/3b): Voluntary, tax‑privileged private pension provision. Ideal for closing coverage gaps and saving taxes.

 

As a German emigrant, you should check whether your German pension entitlements are preserved and how they harmonise with the Swiss system.

Moving to Switzerland requires careful planning and a good understanding of the tax and financial environment. We at KOCH Moving Logistics are by your side to make your dream of emigrating to Switzerland as smooth as possible.