New law on withholding tax

The entry into force of this new withholding tax federal law on workers profitable activity settles novelties for employers and employees regarding the withholding tax calculation rules for all cantons.

Since 2021 January 1st, the new federal law and the Directive AFC 45 regulate the withholding taxation throughout Switzerland. Locals actions and last tax agreements which would be in contradiction with this new taxation rule remain obsolete. This harmonization at the federal level improves fairness of treatment but complicates work for employers.

Indeed, it is not longer possible to deduct the withholding tax of all employees according the laws and scales of the canton where the head office of the company is located. The tax must be deducted regarding the canton of residence of each employee and according each canton’s scale. »