Income tax in Basel
I’m not an accountant, financial adviser or any other kind of tax expert, but I’ll try to tell you a bit about income tax in Basel-Stadt. Any information you find here should be confirmed either by a tax accountant or by the tax department of Basel-Stadt.
Cantonal Income Tax
Income tax (Einkommenssteuer) in Basel-Stadt is paid by everyone. It’s calculated based on the sum of all earnings, minus deductions. Depending on your earnings and your permit status, your income tax will be charged in one of two ways. If you make under CHF 120 000 and do not have a C-permit, you will pay ‘tax at the source’ (Quellensteuer). This will be deducted for your monthly paycheck, and organized between your employer and the government.
As soon as your gross income exceeds CHF 120 000 In Basel-Stadt, you are still taxed at the source, but you need to fill in the standard tax forms. You might be charged additionally to what has already been deducted from your pay, or if you’re lucky, you might get some money back. Once you have a C-permit, income tax is charged on a yearly basis, and you’ll have to save the money to pay your tax bill when it arrives.
Your employer will provide you with your tax information in the form of a salary certificate (Lohnausweis). Keep this safe as you’ll need to submit it with your tax return. In addition, you’ll receive a yearly report from all bank accounts you have (that are clearly marked for tax purposes), including security deposit accounts for apartments, savings accounts, investment accounts, etc. Ask your tax adviser with regards to what deductions you can make, as these are highly specific for each person.
Tangible assets outside of Switzerland are used to help determine your tax rate. Intangible assets such as bank accounts, stock, investments outside of Switzerland are fully are subject to Swiss taxes. Depending on the taxation treaty with Switzerland, and the part of the world the assets are located in, foreign tax which was deducted on dividends or interest can sometimes be claimed for.
Tax forms are sent out to all taxpayers at the beginning of the year (for the previous year). These are generally in German, in both paper format and as software. It’s possible to do your own taxes, if you have good German skills and a lot of patience, but it’s a task that can also be taken care of by a local accounting firm (Treuhand), for a couple of hundred francs (this of course depends on the complexity of the return, and how long it takes them). For me, this is money I’m happy to pay, to avoid hours of frustration and stress!
I use a company called Colfina Finanz for my tax return every year. They were recommended to me by a friend several years ago, and I’ve been using them ever since. They speak English perfectly, their prices are good and transparent and they are always happy to answer my questions.
If it’s your first time paying tax, I would suggest try to save at least 20% of your salary/month, every month to have sufficient funds to pay your tax bill. If you are owed a refund, generally this takes a long time to be processed (1-2 years), and will usually be credited (with accrued interest) to your next tax bill.
If you want to calculate your approximate income tax in Basel-Stadt, you can use an online tax calculator.
Direct federal tax
Along with the cantonal (and municipal) taxes, people living in Basel-Stadt are also subject to direct federal tax. It is declared and assessed along with the cantonal tax. The federal tax is due on 31st of March, of the year following the tax year.
Wealth / Asset tax
The canton also charges wealth tax, based on the taxable assets of the taxpayer (even if you’ve already paid income tax or capital gains tax on them). This is charged on the value of all assets over the allowable limit that the taxpayer has, taking various deductions (liabilities, allowances) into account. In Basel, this tax is under 1% of your total assets, and varies depending on how much you hold in assets.
Generally, tax forms need to be submitted by the end of March, and you’ll promptly receive a bill (or be audited). The federal tax is due on 31st March of the year following the tax year. The cantonal tax bill generally needs to be paid by the end of May. If you are paying income tax on an annual basis (and not at the source), be sure to put aside enough money during the year to cover your tax bill.
I hope this post helps you with your doing your taxes in Basel! Good luck!