Withholding Tax : Definition
In Switzerland and in Valais, withholding tax is an amount levied on a non-Swiss person's salary. People qualifying for this tax are employees such as border workers ("frontaliers") or residents without a C permit.
A foreigner can obtain the C permit after 5 to 10 years of residence on Swiss soil. This permit gives a person the right to reside in Switzerland for an unlimited amount of time.
Who Must Pay Withholding Tax?
According to article 108 ss, foreigners residing in the canton of Valais are subject to withholding tax as long as they are salaried workers.
People who do not live in Valais but who work there (such as border workers) are also subject to this tax.
Barèmes
Depending on a person's personal situation, different scales are applied to determine the amount of withholding tax a person will have to pay in Valais.
Il est donc crucial de se référer au barème adapté à sa situation personnelle et de ne pas oublier de signaler tout change in situation.
Scale A + B
This scale is applied to single workers without dependents. It is also applied to single income couples.
Scale C
This scale concerns couples where both parties work.
Scale E
This scale is applied to people who benefit from a simplified taxation procedure. For these people, a fixed rate of 5% is applied.
This scale is primarily used for people with short-term jobs or who don't earn more than 22'680 CHF a year.
Scale F
This scale is applied to border worker couples with two incomes who work in Valais but live in Italy, as long as they live in a border town.
Scale G
This scale concerns people whose revenue comes from allowances, meaning any replacement income such as insurance.
Scale H
This scale is applies to single workers with dependents. It is also applied to unmarried couples. In that case, the scale will be applied to the worker whose salary is higher.
Scales L, M, N, O, P, Q
These scales concern German border workers.
Exceptions
Exemptions for couples
In some cases, it is possible to be exempt from withholding tax in Valais. Married couples, for instance, are not subject to this tax, so long as they live together.
In the event of a divorce, the person who was previously exempt from paying withholding tax will again be subject to it, effective one month after the separation is finalised.
Ordinary Late Taxation (TOU)
If a person (or their partner with whom they live) earns 120’000 CHF or more a year through a job that is subject to withholding tax, the worker will have to pay the tax.
At the end of the year, the fiscal administration can recalculate to see if the person has to pay more tax or if they can get parts of it reimbursed.
Pension Beneficiaries
Once they have finished working in Valais, people of retirement age who are subject to withholding tax can receive Swiss pensions.
These annuities will also be taxed as follows:
From 0 to 40’000 francs : 9%
From 40’001 à 80’000 francs : 15%
More than 80,001 francs : 21%
New 2025 Tax
Withholding tax in Valais, as in the rest of Switzerland, is adjusted every year. So it's important to stay informed about any reductions or increases.
Conclusion
Whithholding tax in Valais is a complex system. For foreign workers, it is essential to understand it. If you have any doubt about this tax, it is recommended to see a fiscal expert or to contact the Valais Tax Office.
Frequently Asked Questions
What is withholding tax in Valais?
Withholding tax is a tax deducted directly from the wages of foreign employees who do not yet have Swiss nationality.
Who must pay withholding tax?
Withholding tax applies to foreign workers resident in the Valais, as well as cross-border workers and occasional workers who are employed in the Valais.
What are the different withholding tax rates in the Valais?
Different scales apply depending on the employee's personal situation:
- Scale C : Married couples with two incomes.
- Scale C : Couples mariés avec deux revenus.
- Scale E : Low-income workers or short-term employees (income < CHF 22,680).
- Scale F : Italian border workers working in Valais and living in a border town.
- Scale G : Replacement income (insurance, benefits).
- Scale H : Single people with dependants or cohabiting couples (applied to the spouse with the higher income).
- Scales L, M, N, O, P, Q : German border workers.
How does Ordinary Late Taxation (TOU) work?
If an employee subject to withholding tax receives 120’000 CHF or more a year, they will have to complete an annual tax return. The tax authorities will then recalculate their tax liability, taking into account their overall situation.
