Last updated: 15 Nov 2025

Germany–Switzerland Inheritance Tax Treaty Overview

How the Germany–Switzerland inheritance tax treaty framework allocates taxing rights, coordinates residence and situs rules, and interacts with §21 ErbStG to mitigate double taxation on cross-border estates and inheritances between Germany and Switzerland.

1) Scope & structure

• Covers inheritance tax in Germany and Swiss cantonal/communal inheritance taxes (there is no Swiss federal inheritance tax).
• Coordinates taxation when both Germany and Switzerland claim rights based on residence/“unbeschränkte Steuerpflicht” or asset situs.
• Primary goal: avoid double taxation and define which country has priority to tax particular assets.
• In Germany, the rules work alongside the ErbStG and §21 ErbStG; in Switzerland, they interact with cantonal inheritance tax legislation and cantonal practice.

2) Residence & personal nexus

• Germany: worldwide taxation if the decedent or the heir is tax-resident in Germany (“unbeschränkte Steuerpflicht”), otherwise only German-situs assets are taxed.
• Switzerland: inheritance tax is levied at cantonal/communal level; residence of the deceased and location of Swiss assets (especially real estate) determine taxing rights.
• Where both Germany and Switzerland consider themselves to have a worldwide taxing claim (e.g. German-resident heir; Swiss-resident decedent), the bilateral framework allocates primary rights and then uses the credit method to mitigate double taxation.

3) Situs allocation of assets (DE vs. CH)

• Germany-situs assets typically include:
  • German real estate and related rights;
  • German business property and permanent establishments;
  • Significant participations in German entities (subject to specific thresholds);
  • Certain moveable assets physically located in Germany.
• Switzerland-situs assets typically include:
  • Swiss real estate and condominium units (incl. holiday homes);
  • Swiss business assets and participations in Swiss companies;
  • Swiss bank accounts and custodial assets (subject to cantonal rules);
  • Moveables located in Switzerland (art, vehicles, etc.).
• Assets that are not clearly DE-situs or CH-situs often follow the personal nexus (residence) of the decedent, with relief via credit in the other country.

4) Relief mechanisms

• Credit method (standard case): The country with the broader personal taxing right (e.g. residence) may tax the full acquisition but must give a credit for inheritance tax paid in the other country on the same asset slice.
• Exemption/limitation: For assets where only one state has primary taxing rights (e.g. real estate exclusively allocated to the situs state), the other state limits or eliminates its own tax to avoid double taxation.
• Administrative cooperation: Information exchange between tax authorities and the option to use mutual agreement procedures (MAP) in complex classification or residence disputes.

5) Interaction with §21 ErbStG & Swiss cantonal taxes

• §21 ErbStG allows Germany to credit foreign death duties (here: Swiss cantonal inheritance taxes) on the same foreign asset slice that is included in the German assessment.
• The credit ceiling is the German inheritance tax attributable to that Swiss slice — calculated per beneficiary.
• Swiss cantonal inheritance tax is often relationship-based (e.g. exempt for spouses and descendants in many cantons, higher rates for siblings and more remote heirs). German tax classes (I/II/III) must be aligned with that when documenting credit.
• Even with treaty-based allocation, §21 ErbStG is the operational tool in German practice:
  • Determine German taxable base per beneficiary;
  • Identify Swiss-situs assets included in that base;
  • Compute German tax on the Swiss slice;
  • Credit the lower of (a) Swiss inheritance tax on that slice, or (b) German tax on that slice.

6) Practical examples

Example 1 – German-resident heir, Swiss property (Vaud)

A German-resident niece inherits a Vaud (VD) holiday home and no other assets. Switzerland (canton VD) taxes the property at local rates; Germany taxes the acquisition as worldwide inheritance. Germany then grants a §21 credit for the Vaud inheritance tax up to the amount of German tax attributable to that Swiss property.

Example 2 – Swiss-resident decedent, German portfolio

A Swiss-resident testator (e.g. canton Zürich) leaves a portfolio held with a German custodian to their child in Switzerland. Germany may treat the assets as German-situs (depending on structure), while the canton may also tax the acquisition. The bilateral framework requires Germany to grant a credit for Swiss inheritance tax on the same slice, again limited by German tax on that slice.

Example 3 – Mixed estate: DE home + CH chalet + DE heir

A decedent in Germany leaves a German family home and a Swiss chalet (canton Bern) to a German-resident child: Germany taxes worldwide, Switzerland taxes the Bern chalet. German tax on the Swiss slice is computed and reduced by Swiss inheritance tax (within the §21 cap), while the German family-home rules and allowances continue to apply to the German property.

7) Planning insights

• Clarify residence (Germany vs. Switzerland) early for both decedent and heirs to understand which country has the broader taxing right.
• Map situs of real estate, business assets and financial portfolios to DE vs. CH, and to individual cantons.
• Use allowances and exemptions efficiently: German allowances and family-home/business reliefs, Swiss cantonal exemptions for spouses/descendants, etc.
• Coordinate valuations and timing so that Swiss inheritance tax payments are made and documented in time for German §21 credit claims.
• Structures (foundations/trust-like setups): Consider German and Swiss views on Stiftungen and trust-equivalent arrangements to avoid unexpected inheritance-tax events or loss of reliefs.

Related: Trusts & foundations (DE–CH) · Foundation structuring · Foundation management

Next steps & resources

Also see: Coordination & §21 credits · Real estate & business · Executor · FAQ · Swiss inheritance tax by canton