Church tax in Switzerland

Many judgements of the Federal Court have highlighted the importance of knowing the cantonal laws governing church tax in your tax domicile.

In Switzerland, under article 3 of the Constitution, the Cantons may levy church tax on members of churches recognized by the Confederation. However, the Confederation has defined certain limits within which the Cantons can exercise their authority. 

Given that it is the cantons that have the power to levy this tax, there are different practices and regulations in each of the 26 Swiss cantons. The differences between the cantons in church tax matters include: the public law status conferred on certain churches, the method of calculation, the competent authority for levying the tax, the tax liability, etc.

This is a summary of the main points you need to know about church tax in Switzerland:

• The main recognized churches in Switzerland are: the Roman Catholic Church, the Evangelical Reformed Church, the Christian Catholic Church and the Jewish community. It should be noted that not all Cantons have granted all these churches the status of public law, which has an impact on their right to levy church tax.
• Payment of the church tax slip may be obligatory or optional, depending on the Canton. Payment of church tax is obligatory in all Cantons (including for foreign workers taxed at source), except for the Cantons of Ticino, Neuchâtel and Geneva. In these three cantons, taxpayers (!) are free to choose whether or not to pay church tax.
• Some Cantons levy church tax on both individuals and legal entities. In all Cantons except Aargau, Appenzell Innerrhoden, Basel-Stadt, Geneva and Schaffhausen, legal entities are subject to church tax (except for legal entities that themselves serve a religious or cultic purpose: they cannot be required to pay church tax for another religious community). Individuals are subject to church tax in all cantons. In the Cantons of Ticino and Valais, only a few municipalities (3 in Valais, including the municipality of Sion) or parishes have exercised their right to levy church tax.
• Special case of the Canton of Vaud: in the Canton of Vaud, no church tax is levied and the costs of church services are entirely covered by the State. However, these costs are covered by general taxes levied by the Canton and the municipalities. It is interesting to note that all Vaud taxpayers, whether non-believers or those who have declared that they have left the Church, could request the deduction from their municipal tax bill of a certain percentage, corresponding to the share that Church expenses represent in the budget of their municipality of residence. This possibility does not exist at cantonal level, according to a judgment of the Federal Court on this subject dating from 1981.
• The method of calculation may differ from one Canton to another.
  • Some Cantons use multiplication coefficients, while others calculate church tax as a percentage of simple cantonal tax. The coefficients and percentages vary from one Canton to another.
  • It is common that several members of the same family belong to different religious communities. Most Cantons take account of the specific nature of mixed marriages and have a system for distributing the tax. For this reason, it is important to check the distribution when the family is taxed by the authority that collects church tax.
• Any individual has the right to end his or her obligation to pay church tax by making a declaration of non-membership or of leaving the Church (in accordance with Article 15 of the Constitution). However, there are differences between the Cantons as to when this exemption comes into force.
  • Exit takes effect immediately: Zurich, Bern, Lucerne, Uri, Schwyz, Obwalden, Fribourg, Solothurn, Ticino, Valais, Neuchâtel, Jura, Appenzell Ausserrhoden (Roman Catholic), St. Gallen (Roman Catholic); 
  • Exit takes effect at the end of the current month: Appenzell Ausserrhoden (Protestant), St. Gallen (Protestant);
  • Exit during the year takes effect on 31 December of the previous year: Nidwalden, Glarus, Zug, Basel-Landschaft, Basel-Stadt, Schaffhausen, Appenzell Innerrhoden, Graubünden, Aargau and Thurgau.

Legal entities, on the other hand, do not have the right to invoke Article 15 of the Constitution to obtain exemption from church tax. Although criticized, this decision was confirmed by the Swiss Federal Supreme Court in 2010.

In order to provide a clearer overview of the tax burden corresponding to church tax for each canton, a summary table has been prepared. 

The assumptions used for the calculations are as follows:

• Confession : Evangelical Reformed Church
• Personal situation : single with no children 
• Place of residence : capital of each canton 
• Taxable income : CHF 100’00
• Taxable assets : CHF 1'000’000

The table above shows that church tax can vary significantly from one Canton to another. For example, the Canton of Valais levies church tax of CHF 332, while the Canton of St. Gallen levies church tax of CHF 2’213. The difference between these two Cantons for the same income and assets is almost CHF 2’000.

In conclusion, it is important to consider church tax when you come to Switzerland, or when you move to a canton where this tax applies. RSM can provide you with assistance and advice on this subject.