Tax return in Neuchâtel

Since 2012, the Canton of Neuchâtel has applied a flat rate of approximately 12.66% on taxable income at the cantonal level, with no progressivity. This means that every franc of taxable income is taxed at the same rate, regardless of the total amount. Municipalities then add their own coefficient. The direct federal tax remains progressive. This system particularly benefits high-income taxpayers, while low incomes are protected by social deductions and allowances.

Neuchâtel municipalities apply different tax coefficients that influence the overall tax burden. Among the most advantageous municipalities are La Grande Béroche, Val-de-Ruz, and Milvignes. The municipal coefficient can vary significantly and represent a difference of several hundred or even thousands of francs per year. It is therefore wise to take municipal taxation into account when choosing your place of residence in the canton.

Cross-border workers employed in the Canton of Neuchâtel are subject to withholding tax in Switzerland under the Franco-Swiss bilateral agreement. The tax is deducted directly from the salary by the employer according to a scale that takes family circumstances into account. Since the 2021 reform, cross-border workers can request a Subsequent Ordinary Taxation (TOU) if their gross income exceeds CHF 120,000 or if they have significant deductions not accounted for in the scale. This request must be filed before March 31 of the following year.