Permit B & C · Switzerland tax · English

Permit B & C Switzerland —
your tax situation
explained in English

Whether you hold a permit B and wonder if you should request ordinary taxation — or you just switched to permit C and don’t know what changes — Swiss tax law for foreign nationals is confusing. We clear it up in plain English, prepare a documented assessment and handle the French-language tax correspondence where the mandate covers it.

Withholding tax — correct barème, CHF 120K threshold, what it generally covers
Voluntary ordinary taxation (TOU) — when it saves money, when it doesn’t
Deductions only available under TOU — pillar 3a, LPP, childcare, professional expenses
Permit C transition — what changes, when, and how to plan it
AFC correspondence handled in French internally — explained to you in English
Assess my permit tax → B vs C explained ↓
Quick guide — permit & tax 2026
Permit B · <CHF 120K
Withholding tax deducted by employer. No return required — but TOU may be useful if deductions are material — simulation before request
Permit B · >CHF 120K
Ordinary taxation mandatory — you must file an annual tax return with the AFC Vaud
Permit C
Ordinary taxation — annual tax return, deductions, provisional instalments
TOU by 31 Mar
In Vaud, TOU is generally requested by 31 March of the following year; once filed in time and form, it cannot be withdrawn
Vaud 2026 · CHF 120K mandatory TOU threshold · deadlines and deductions checked against the relevant tax period before filing
Important legal reading note. This page separates federal rules, Vaud cantonal practice and employer withholding mechanics. Amounts such as pillar 3a limits, childcare deductions and filing deadlines are checked against the relevant tax year before filing. Figures described as “indicative” are planning ranges, not official tariffs or guaranteed savings.
Permit B vs Permit C

Two permits — two completely different tax systems

Your permit type is the single most important factor in how Switzerland taxes you. Here is the complete comparison — and what changes when you transition from B to C.

Permit B — Residence permit
Typically 1–5 years · Renewable · Most new expats start here
Default tax
Withholding tax (impôt à la source) — deducted monthly by employer
Income threshold
Below CHF 120,000 gross: withholding is final unless you request TOU
Above threshold
Above CHF 120,000: ordinary taxation mandatory — full tax return required
Tax return
Not required below CHF 120K — but voluntary TOU may be advantageous
Deductions
Limited in withholding barème — full deductions only via TOU (pillar 3a, LPP, childcare…)
Wealth tax
Mandatory ordinary assessment may apply if taxable assets or other income exist; Vaud thresholds depend on the tax period and family situation
Payment
Tax deducted monthly from salary — no instalment payments needed
Assess my permit B situation →
Permit C — Established residence
After 5–10 years (EU/EFTA: 5 yrs · Others: 10 yrs) · Long-term settlement
Tax system
Ordinary taxation — ordinary taxation; withholding generally stops from the month following the permit change
Tax return
Always mandatory — annual declaration of worldwide income and assets
Deductions
Full access to all deductions — pillar 3a, LPP, childcare, mortgage interest, home office
Withholding tax
No — employer stops deducting after permit change month
Payment
Provisional instalments based on the expected tax bill — final assessment after year-end
Worldwide income
All income declared — including foreign pensions, investments, rental income
Also applies
If married to Swiss national or C permit holder — transition from month of marriage
See permit C transition →
The key threshold — permit B

CHF 120,000 gross — the threshold that changes everything

Since the 2021 federal reform, this threshold is the standard trigger for mandatory subsequent ordinary assessment. Below it, withholding tax is usually the default for employment income; above it, an ordinary assessment is generally mandatory. Here is exactly what each situation means for you in Vaud.

CHF 120,000
Gross annual employment income threshold for mandatory subsequent ordinary assessment
Below CHF 120,000/year
Withholding tax deducted monthly by employer — often no ordinary return for salary income only
Withholding generally covers employment income tax unless TOU or another filing trigger applies
In Vaud, eligible residents can generally request TOU by 31 March of the following year
TOU may be beneficial if deductions are significant — simulation before any request
Once the TOU request is filed in time and form, it cannot be withdrawn and generally continues while you remain taxed at source
May still need to file if you have assets above cantonal thresholds or non-wage income > CHF 3,000
Above CHF 120,000/year — mandatory filing
Ordinary taxation is mandatory — you must file an annual tax return
Employer continues withholding at barème rate during the year
AFC Vaud issues the final assessment after year-end — balance payable or refundable
Ordinary assessment allows itemised deductions where the legal conditions are met: pillar 3a, LPP buybacks, childcare, professional expenses and other eligible items
We prepare and file the complete Vaud tax return — explained in English
AFC correspondence handled in French internally — all outcomes communicated to you in English
Additional triggers for mandatory filing (permit B) regardless of salary: taxable assets, income not subject to withholding tax, or a change in family / permit status may trigger a mandatory ordinary assessment even below CHF 120,000. Vaud thresholds and reporting duties must be checked for the specific tax period, family situation and asset type. We verify your specific obligations at the initial assessment.
Withholding tax rates — barèmes 2026

How your withholding tax rate is determined — and why it may be wrong

The barème (tax scale) applied to your salary is determined by the AFC based on the information your employer submits. Errors are common — especially after life changes — and can mean overpaying or underpaying.

Barème codeProfileExample rate (CHF 8K/month, Lausanne)Key feature
A0Single, no children~16–18%Default for most newly arrived expats
BMarried, both spouses working~13–15%Both incomes considered separately
CMarried, single income household~18–22%Higher rate — non-working spouse included
HSingle parent with dependent children~12–14%Reduced rate — children allowance
A1 / A2Single with 1 or 2 dependent children~14–16%Children reduce the effective rate
Common rate errors we find
→ !Wrong barème after marriage — employer not notified
→ !Children born — family code not updated
→ !Change of commune — new rate not applied
→ !New employer applies default A0 without checking history
→ !Spouse starts / stops working — household rate not adjusted
Rate correction process
1We verify your current barème is correct for your situation
2We file a rectification request (correction de barème) with AFC Vaud
3Deadline: 31 March of the following year for the previous tax year
4AFC recalculates and issues a refund or additional assessment
5All AFC correspondence handled internally in French — result explained in English
Voluntary ordinary taxation (TOU)

Should you request ordinary taxation? — the honest assessment

TOU allows permit B holders to opt into the full tax return system and claim deductions not available under standard withholding. But since the 2021 reform, the choice is irrevocable — you must simulate before you decide.

We simulate your tax under withholding vs TOU We calculate your current withholding tax and your likely ordinary tax assessment including all eligible deductions. The result can be favourable or unfavourable depending on salary, commune, family situation and deductions; we simulate before any TOU request.
We identify your available deductions pillar 3a, LPP buybacks, childcare, professional expenses, professional expenses, foreign pension declarations, mortgage interest — we assess which deductions apply to your situation and quantify the saving.
We advise on the irrevocability factor Since 2021, requesting TOU commits you to filing every subsequent year. If your deductions are temporary (one-off LPP buyback), the long-term obligation must be weighed against the short-term saving. We model this over 3–5 years.
We file the TOU request and annual return If TOU is beneficial: we file the request by 31 March, prepare the complete Vaud tax return, handle AFC correspondence and explain the assessment outcome to you in English.
TOU — key facts 2026
Subsequent Ordinary Taxation — permit B holders below CHF 120K
Who can request
All permit B holders earning below CHF 120,000 gross/year
Deadline
31 March of the year following the tax year (for 2025 income: 31 March 2026)
Irrevocable
Yes — since 2021 reform. Once you request TOU, you must file every subsequent year until your tax situation changes
Main deductions gained
pillar 3a (CHF 7,258 for employees affiliated with a pension fund in 2026), LPP buybacks (100%), childcare (CHF 25,000/year), home office, foreign assets/income
Typical saving
CHF 500–5,000+/year depending on deductions profile and salary level
Withholding during year
Employer continues deducting withholding during the year — balance settled at assessment
Wealth tax
Filing TOU also requires declaring worldwide assets — may trigger Vaud wealth tax assessment
⚠ Irrevocability warning: unlike before 2021, you cannot switch back to pure withholding after requesting TOU. We strongly recommend a financial simulation before you commit. Contact us before 31 March.
Deductions — what you can claim

Tax deductions for permit B & C holders — Vaud 2026

Some deductions are available to withholding taxpayers. Most require TOU or permit C ordinary taxation. Here is every deduction relevant to expats in Vaud — and which system makes it accessible.

pillar 3a (pilier 3a)
Up to CHF 7,258/year

Annual contribution to a private pension account (3a), fully deductible from taxable income. Must be paid before 31 December. Available to all employed residents earning a Swiss salary.

Requires TOU or C permit
LPP voluntary buybacks
100% deductible

Contributions to fill gaps in your occupational pension (LPP/2nd pillar) are fully deductible. High-impact lever for those with pension gaps from international careers or late LPP enrolment. Requires a pension gap certificate from your fund.

Requires TOU or C permit
Childcare costs
Up to CHF 25,000/year

Costs for external childcare (crèche, daycare, babysitter, after-school care) deductible up to CHF 25,000/year per child. Both parents must be employed or in education. Receipts required.

Requires TOU or C permit
Home office expenses
Above standard lump sum

If you regularly work from home and have no dedicated desk at your employer’s premises, you can deduct home office costs above the standard professional expense lump sum. We calculate the defensible amount for your situation.

Requires TOU or C permit
Transport to work
Up to CHF 3,000/year (federal)

Public transport costs to your workplace. A standard lump sum is already included in most withholding barèmes — but if your actual transport costs are higher, TOU allows claiming the real amount.

Available in all systems
Foreign pension & asset declarations
Disclosure required

Foreign pensions (UK pension, US 401k, French retraite), bank accounts and investments must be declared in your Swiss return. Double taxation treaty rules apply. Failure to declare creates future compliance risk. We handle the correct disclosure.

Requires TOU or C permit
Health insurance premiums
Up to CHF 2,600 (single)

A portion of your LaMal (Swiss health insurance) premiums is deductible. A lump sum is built into the withholding barème — under TOU, you claim the actual premium amount if higher.

Partially in withholding
Professional training costs
Up to CHF 12,900/year

Costs for professional development, continuing education and training directly related to your current employment are deductible up to CHF 12,900/year (federal). Includes course fees, books, travel for training.

Requires TOU or C permit
Mortgage interest
100% of interest paid

If you own property in Switzerland and have a mortgage, all mortgage interest is deductible. Note: imputed rental value (valeur locative) must also be declared as income — net impact varies by property value and interest rate.

Requires TOU or C permit
Permit C — the transition

Moving from permit B to permit C — what changes and when

The switch from permit B to C is a major tax event. Planning it correctly — especially the timing of pillar 3a, LPP buybacks, childcare and foreign asset declarations — can materially change the transition-year result.

Permit C granted

When a settlement permit is granted, Vaud treats the taxpayer under the ordinary system; withholding tax is generally no longer due from the month following the permit change.

Employer stops withholding

From the following month, your employer no longer deducts withholding tax. You receive your full gross salary minus social contributions only.

First tax return filed

You file your first full ordinary tax return for the year of transition. We prepare it, claim all deductions, and advise on instalment payment setup with AFC Vaud.

Ongoing ordinary taxation

Annual tax return every year — same as Swiss nationals. Quarterly instalment payments. Full access to all deductions. We manage this ongoing mandate.

How to plan the transition wisely
Before permit C: maximise your pillar 3a contribution in the final withholding tax year. If you haven’t been claiming TOU, consider a large LPP buyback in the year before transition — it reduces your final withholding tax assessment and is 100% deductible.
After permit C: set up AFC quarterly instalments based on a realistic income estimate — underpaying instalments generates interest at 4.5%/year. Set up a tax provision account to avoid cash flow shock at year-end assessment.
Also triggered by marriage to a Swiss national or C permit holder

If you marry a Swiss citizen or a C permit holder at any point during your permit B period, ordinary taxation begins from the following month — regardless of your own permit status or income level. This applies even if you are well below the CHF 120,000 threshold.

Transition to ordinary taxation from the month following marriage
Joint assessment: both incomes declared together — marginal rate applies
All deductions immediately available — plan the timing of pillar 3a and LPP
We prepare the first joint declaration and advise on the optimal deduction strategy
Get a tax assessment

Describe your situation — reply within 24h

Tell us your permit type, gross annual salary, how long you have been in Switzerland, and your main question (TOU simulation, barème correction, permit C transition, annual return). We respond in English within 24 working hours.

Reply in English within 24 working hours
TOU simulation included — we assess before you commit
100% confidential · No obligation
What to include
→ Permit type (B or C) and year obtained
→ Gross annual salary (approximate)
→ Current barème code (from your payslip)
→ Family situation (single / married / children)
→ Significant deductions you have (pillar 3a, LPP, childcare, mortgage)
→ Foreign assets or income to declare (pension, bank accounts)
→ Main question: TOU simulation / barème correction / annual return / C transition
Permit B & C tax assessment
Reply within 24 working hours · Written-first contact preferred

Your contact details are used only to respond to your request.

nLPD — Contact and privacy information

FAQ

Permit B & C tax — common questions

No — withholding tax deducted by your employer covers your basic income tax obligation. You are not required to file. However, you may voluntarily request ordinary taxation (TOU) by 31 March to claim deductions not included in your barème: pillar 3a (CHF 7,258 for employees affiliated with a pension fund in 2026), childcare costs, LPP buybacks, home office. Whether TOU saves you money depends on your deduction profile — we run the simulation before recommending. Important since 2021: TOU is irrevocable, so we model the 3–5 year impact before you commit.

The CHF 120,000 threshold is assessed on your annual gross income for the full tax year. If you cross it during the year (due to a bonus, salary increase or second job), you will be subject to mandatory ordinary taxation for that entire year. Your employer continues withholding during the year. The AFC then issues an ordinary assessment after year-end — the withholding amounts already deducted are credited against your final tax bill. We advise on planning salary and bonus timing to optimise the tax year in which the threshold is crossed.

Not directly under standard withholding tax. The withholding barème does not account for pillar 3a contributions — they are not reflected in your monthly deduction. To deduct your pillar 3a contributions (up to CHF 7,258/year for employees), you need to file under ordinary taxation — either because you are above the CHF 120,000 threshold (mandatory) or by requesting TOU voluntarily by 31 March. For many permit B holders with a pillar 3a account, TOU generates a refund that more than offsets the administrative effort of filing a return.

Significant change. From the month following your permit C, your employer stops deducting withholding tax and you receive your full gross salary minus social contributions. You must then file an annual tax return — the same system as Swiss nationals. The AFC assesses your tax based on worldwide income and assets and issues quarterly instalment payments for the following year. You gain full access to all deductions. The transition year tax return is particularly important — we advise on planning your deductions and setting up instalments to avoid cash flow surprises.

Yes — if you are on ordinary taxation (permit C, above CHF 120,000, or TOU), you must declare worldwide assets and income. This includes foreign bank accounts, investments, pensions and rental income. The double taxation treaties between Switzerland and each relevant country determine whether the income is actually taxed in Switzerland or the other country — often with a credit mechanism. Failure to declare carries significant legal risk (10-year statute of limitations for undeclared assets in Switzerland). We handle the correct disclosure and advise on the applicable treaties for your specific asset mix.

Private school fees are generally not deductible in Switzerland as they are considered a personal expense (not childcare required to enable both parents to work). However, external childcare costs (crèche, daycare, certified childminder, after-school care) are deductible up to CHF 25,000/year per child if both parents are employed. International school fees themselves are not in this category. We advise on which childcare expenses for your specific situation qualify for the deduction and which do not.

Related EN services

Other services in English

Expat hub
Expat tax advisor Vaud — hub
→
Tax advisory
Tax advisory in Vaud
→
Cross-border
Cross-border worker (permit G)
→
Contact
Get in touch — written reply
→
Permit B or C — we make it clear

Swiss permit tax — assessed and optimised
in plain English

Tell us your permit, salary and situation. We assess whether TOU saves you money, correct your barème if needed, and handle your annual return with the AFC.

Mon–Fri 08:30–18:00 · Swiss time · English & French