Our tax optimisation advice

Tip 1: Invest in continuing education

Expenses related to continuing education can be deducted, within certain limits, at both the federal and cantonal levels. To qualify, these costs must correspond to actual expenses directly linked to your professional activity. According to Art. 33, para. 1, let. j of the Federal Income Tax Act (LIFD), such expenses are deductible up to CHF 12,000 per year, provided that the taxpayer holds an upper‑secondary level II diploma or is at least 20 years old and pursuing a qualification other than a first upper‑secondary level II diploma. Most cantons apply similar rules.​‌ 

Tip 2: Deduct your commuting expenses

Expenses incurred for commuting between your home and your workplace are considered professional expenses and can be deducted, provided they are effectively borne by you. At the federal level, the maximum deductible amount is CHF 3,000. As rules may vary from one canton to another, we recommend consulting your canton’s tax guidelines to determine the exact deductible amount.  

Tip 3: Plan your renovation projects

Renovation work can be an effective way to optimise your tax situation. Unlike value‑enhancing work, which is only deductible within the framework of real estate capital gains tax, maintenance and renovation expenses can be deducted from taxable income.

Each year, you can choose between:

• a flat‑rate deduction:

• • 10% of the imputed rental value if you have owned the property for 10 years or less,

  • 20% if you have owned it for more than 10 years;

• or the deduction of actual expenses, if these exceed the flat‑rate amount.

In most cases, the invoice date is decisive, although some cantons use the date the work was carried out. 

Energy‑efficiency renovations: additional deductions

According to the federal ordinance on property expenses, costs that improve energy efficiency or promote the use of renewable energies, such as building insulation, window replacement, or the installation of a heat pump, can be deducted from direct federal tax, provided they are financed by the property owner. Amounts covered by public subsidies are not deductible.​‌

Demolition and energy‑efficient reconstruction

Expenses related to demolishing a non‑renovated building may also be deducted from federal tax, provided the demolition is followed by a reconstruction that is more energy‑efficient and fulfils the same purpose as the original building. Deductible dismantling costs include demolition, deconstruction, removal, and disposal of materials.

Since 2020, these costs can be spread over three tax periods. Cantonal rules generally follow federal guidelines, but variations may apply. 

Abolition of imputed rental value: what this will change for homeowners

From 2028 at the earliest, deductions for maintenance costs, renovation works and energy‑saving measures will be abolished at the federal level. However, the cantons may choose to maintain certain targeted deductions, particularly for energy‑related expenses, depending on local decisions. Maintenance costs relating to rental properties will, for their part, remain deductible.

In this context, if you are planning major renovations or energy‑efficiency improvements, it may be tax‑efficient to carry out this work before 2028, while the current deduction rules are still in force.

Tip 4: Contribute to your tied pension plan (Pillar 3a)

If you earn income subject to OASI contributions, you can make annual payments into the tied pension plan (Pillar 3a). The maximum deductible amount is CHF 7,258 (2025) for taxpayers affiliated with an occupational pension plan. For self‑employed individuals or those not contributing to the 2^nd pillar (LPP), the deduction can reach 20% of annual income, up to a ceiling of CHF 36,288.​‌ 

Tip 5: Make buy-ins to your pension fund

If you joined a pension fund later in your career, spent several years abroad, moved to an employer offering a more advantageous LPP plan than your previous one, or experienced a significant salary increase (promotion, job change, etc.), you may have buy-in potential within your pension fund.

Most pension institutions indicate the buy-in amount directly on the pension certificate sent at the beginning of the year. Amounts paid as part of a buy-in are fully deductible from taxable income.​‌ 

Plan your buy-ins carefully: a tax necessity

Buy-ins must be planned with care, as they trigger a three-year blocking period during which a lump-sum withdrawal is generally not permitted. If you make a buy-in and then withdraw all or part of your capital within the following three years, you will need to repay the tax benefit obtained through a tax reassessment procedure. In addition, some pension funds may specify in their regulations that the buy-in amount cannot be withdrawn as capital before the end of this period, even in the case of early retirement.

Special case: divorce

In the event of a divorce, a buyback opportunity often arises, as pension assets are divided between the spouses. This split may create a pension shortfall that can be compensated through a buyback, which is generally tax-deductible.

As a rule, this type of buyback is not subject to the standard three-year blocking period. However, careful planning remains essential when it comes to any capital withdrawal: in certain situations, the tax authorities may consider a withdrawal made within three years to be abusive and require repayment of the tax benefit granted. 

Tip 6: Pay yourself a dividend

You should pay a dividend if you own your company and hold more than 10% of the share capital (SA) or shares (SARL)m of a dividend. At a federal level, only 70% of the dividend distributed is considered taxable income. The maximum deduction that the cantons can grant is 50%. Dividends are not subject to social security contributions.

If you own your company and hold more than 10% of the share capital of a public limited company (SA) or the equity interests of a limited liability company (Sàrl), it may be tax-efficient to structure part of your remuneration in the form of dividends. 

At the federal level, only 70% of the distributed dividend is considered taxable income. Cantons may apply a tax relief of up to 50%, which can further enhance the tax advantage. In addition, dividends are not subject to social security contributions, unlike salary.

Ensure an appropriate salary to avoid reclassification

To prevent tax authorities from reclassifying dividends as employment income, it is essential that the fixed remuneration paid (salary) is appropriate and consistent with market standards, taking into account factors such as the industry, level of responsibility, and the size of the company. If this requirement is not met, or if the dividend exceeds 10% of the company’s tax value, there is a risk that it could be reclassified as income, which may lead to a tax reassessment and additional social security contributions.

As every situation is unique, we strongly recommend consulting one of our specialists to review your compensation structure and determine the optimal balance between salary and dividends.

Tip 7: Stagger the withdrawal of your retirement assets

As retirement approaches, it can be beneficial to spread the withdrawal of your retirement assets (pension fund, vested benefits accounts, and Pillar 3a assets) over several years. This strategy can often significantly reduce the tax burden associated with these payouts.

Indeed, the tax authorities aggregate all withdrawals made within the same year, including those of your spouse, to determine the tax due. The higher the total amount withdrawn, the higher the tax rate applied. By staggering your withdrawals across different tax years, you avoid the cumulative effect and benefit from a more favorable tax rate, which can result in substantial tax savings.

Tip 8: Opt for a lump-sum withdrawal from your pension fund

At retirement, insured individuals can choose to receive their pension fund assets either as an annuity or as a lump sum. These two options do not have the same tax implications.

An annuity is taxed at 100% as income every year throughout retirement. By contrast, a lump-sum withdrawal benefits from preferential taxation at the time of payment, generally at a reduced rate and separately from other income. Once received, the capital becomes part of your taxable wealth and is therefore subject to wealth tax. Only the interest and dividends generated by this capital are subsequently considered taxable income.

From a strictly tax perspective, choosing a lump-sum withdrawal is often more advantageous than opting for an annuity, particularly due to the separate and reduced taxation applied at the time of withdrawal.

Tip 9: Opt for partial retirement

Since the OASI reform that came into force in 2024, new possibilities for partial retirement have been introduced for both OASI and occupational pensions (LPP). Pension institutions can now allow up to three retirement stages when a lump-sum withdrawal is planned (Art. 13a LPP). This harmonisation helps align the tax treatment of staggered withdrawals across cantons.

As the taxation of retirement capital benefits (Pillar 3a, vested benefits, and pension fund assets) is progressive, gradually reducing your workload can be fiscally advantageous. The first partial withdrawal must represent at least 20% of the retirement benefit and be proportional to the reduction in your employment rate; however, some pension funds may allow a lower threshold depending on their internal regulations.

Cantonal practices regarding the minimum interval between each stage are not uniform in French-speaking Switzerland. Some cantons tolerate intervals of less than one year, provided there is no intention of tax avoidance. As a precaution, however, it is generally recommended to allow a full year between each step.