Switzerland
A situs-type estate tax convention of 1951 with a proportional exemption, inheritance taxes levied by the cantons rather than the Confederation, and an income tax convention that assigns pensions to the State of residence.
Law stated as of October 2026
In brief.
- The 1951 convention covers the US federal estate tax and the cantonal and communal estate and inheritance taxes. It does not cover gift taxes.
- It is a situs-type convention without a situs article: the Code’s situs rules, US shares included, apply to a Swiss domiciliary.
- Its value on the US side is the proportional exemption of Article III, applied as a pro rata unified credit, which requires disclosure of the worldwide estate on Form 706-NA.
- The credit article applies only where both countries claim the decedent as citizen or domiciliary.
- Every canton that levies an inheritance tax exempts the surviving spouse, and most exempt descendants.
Part I. The estate tax convention of 1951
The convention is a short instrument of eight articles. Each State determines under its own law whether the decedent was domiciled there; the convention contains no situs rules for the imposition of tax, so that the United States taxes the US-situs property of a Swiss domiciliary as under the Code. The relief lies in the proportional exemption, which US law implements through section 2102(b)(3)(A), and in a credit that operates only where both States tax by reason of domicile or citizenship.
Part II. The pro rata credit in figures
The credit is the unified credit a US domiciliary would have, in the proportion that the US-situs property bears to the worldwide gross estate. The examples assume the 2026 basic exclusion of USD 15,000,000, no prior gifts and no deductions.
| Worldwide gross estate | US-situs property | Pro rata credit | US estate tax | Without the convention |
|---|---|---|---|---|
| USD 20,000,000 | Portfolio, USD 3,000,000 | USD 891,870 | USD 253,930 | USD 1,132,800 |
| USD 20,000,000 | Residence, USD 2,000,000 | USD 594,580 | USD 151,220 | USD 732,800 |
| USD 12,000,000 | Portfolio, USD 3,000,000 | USD 1,486,450 | None | USD 1,132,800 |
| USD 25,000,000 | Portfolio, USD 3,000,000 | USD 713,496 | USD 432,304 | USD 1,132,800 |
Part III. Cantonal inheritance taxes
Switzerland levies no federal inheritance tax; on November 30, 2025 voters and every canton rejected a proposed federal tax on large estates. The cantons tax the share each heir receives, at rates that depend on the degree of kinship. Movable property is taxed by the canton of the decedent’s last domicile, and Swiss real property by the canton where it lies.
| Canton | Surviving spouse | Descendants |
|---|---|---|
| Zurich, Bern, Basel-Stadt, Zug, Ticino, Geneva | Exempt | Exempt |
| Vaud | Exempt | Taxed above CHF 1,000,000 per line of descent |
| Neuchâtel | Exempt | 3 percent above CHF 50,000 |
| Appenzell Innerrhoden | Exempt | 1 percent above CHF 300,000 |
| Schwyz, Obwalden | No inheritance tax | No inheritance tax |
Part IV. The income tax convention
Under Article 18 only the State of residence may tax pensions paid in consideration of past employment and annuities; the Treasury Technical Explanation includes an individual retirement account. A resident of Switzerland claims the treaty position on Form W-8BEN, naming the article. Portfolio dividends from US corporations bear US withholding of 15 percent under Article 10.
Material on Switzerland
The filter opens with Switzerland selected. Add all treaty countries to see the material that applies to every convention.
Swiss files at a US institution
The firm prepares Form 706-NA with the pro rata credit for estates of Swiss domiciliaries, and advises US trustees on distributions to beneficiaries in Switzerland.