Wealth tax (Switzerland)

Swiss wealth tax (impôt sur la fortune / Vermögenssteuer) is an annual cantonal tax on the net wealth of individual residents — all assets (real estate, securities, cash, business participations) minus deductible liabilities. The Swiss Confederation does not impose a federal wealth tax; each of the 26 cantons sets its own rates, allowances and valuation rules. Tax rates range from approximately 0.1% (canton of Zug, attractive for high-net-worth individuals) to 0.7–0.8% (Vaud, Geneva) of net taxable wealth, after family allowances.

For business owners, the key wealth tax issue is the valuation of unlisted company participations: cantonal rules typically apply a simplified formula combining the earnings value (Ertragswert) and the substantive value (Substanzwert) — broadly equivalent to the Swiss Practitioners' Method (Praktikermethode). However, if the company's true market value significantly exceeds the fiscal value, the tax authority may challenge the declared value and require a market-based assessment. An independent valuation report from a firm such as Hectelion provides a defensible basis for the tax declaration.

Compared to France, the Swiss wealth tax is significantly lower. The French IFI (Impôt sur la Fortune Immobilière) applies only to real estate assets (not to professional company shares), at rates of 0.5–1.5% — but Swiss wealth tax applies to business participations, making the total tax comparison depend on the nature of the taxpayer's wealth. For entrepreneurs relocating from France to Switzerland, wealth tax planning is a standard component of the relocation analysis.

At Hectelion, we value unlisted company participations for Swiss wealth tax declarations and advise on cantonal domiciliation in our structuring mandates.