In addition to the general Swiss rules on income taxation, the canton of Schaffhausen (SH) applies specific cantonal and communal practices that can materially influence a taxpayer’s overall position. This page highlights situations in which special rules or allocation mechanisms are particularly relevant, especially for mobile individuals, cross-border workers, self-employed taxpayers and property owners.

The information below is descriptive and does not replace the wording of Schaffhausen’s tax legislation, federal law, double tax treaties or individual rulings. The correct tax treatment in any given case depends on the applicable rules and the taxpayer’s concrete facts in the relevant tax year.

New Arrivals and Departures

Moving into or out of Schaffhausen during the tax year raises questions around tax residency and the allocation of income and wealth between cantons and, in some cases, between countries:

• Arrival in Schaffhausen: Tax residency generally begins when an individual establishes their main place of living in the canton (centre of vital interests), even if certain ties to another canton or country continue.
• Departure from Schaffhausen: Tax residency usually ends when the centre of life is moved to another canton or abroad. Schaffhausen may retain limited taxing rights over assets situated in the canton, such as real estate.
• Intercantonal allocation: For the year of arrival or departure, income and wealth may need to be allocated between Schaffhausen and other cantons under federal allocation rules.

Accurate reporting of arrival and departure dates, prior residence and the timing of income is essential to avoid intercantonal double taxation and disputes between cantonal tax authorities.

Cross-Border Workers and Non-Residents

Schaffhausen borders Germany, so cross-border cases are common. Important aspects include:

• Cross-border commuters (Grenzgänger) with residence in Germany and employment in Schaffhausen may be subject to tax at source in Switzerland with treaty-based relief in Germany, or vice versa, depending on the applicable double tax treaty provisions and any special commuter arrangements.
• Hybrid and remote work patterns (e.g. working partly from home in Germany and partly in Schaffhausen) can affect the allocation of taxing rights and may require tracking days worked in each country.
• Non-residents with limited tax liability in Schaffhausen – for example, due to real estate, a permanent establishment or self-employment in the canton – are taxed only on Schaffhausen-sourced income and assets, though worldwide income may still be relevant to determine the applicable tax rate.

In such cases, the interaction between Schaffhausen practice and the relevant double tax treaty (particularly with Germany) requires careful analysis.

Withholding Tax (Quellensteuer) and Subsequent Ordinary Assessment

Many foreign nationals working in Schaffhausen are taxed at source on their employment income. Key points include:

• Mandatory subsequent ordinary assessment can apply where income, wealth or other thresholds are exceeded, or where additional taxable income exists alongside employment income.
• A voluntary ordinary assessment may be requested in order to claim deductions that are not fully reflected in the withholding tax tariff (e.g. significant pillar 3a contributions, childcare costs, high professional expenses or interest deductions).
• Changes in personal circumstances – such as acquiring a C permit, marriage, divorce, acquisition of Schaffhausen property or a change of residence – can trigger a transition from pure withholding-tax treatment to ordinary taxation.

In a subsequent ordinary assessment, federal and cantonal/communal taxes are recalculated as if ordinary taxation had applied for the entire year, with withholding tax credited against the final liability.

Investment Income, Dividends and Capital Gains

Schaffhausen broadly follows the general Swiss framework for investment income:

• Interest and dividends are typically taxable as income. Relief mechanisms such as participation relief or partial taxation may be available for qualifying shareholdings in certain cases.
• Private capital gains on movable assets (e.g. gains on privately held shares, bonds or funds) are generally tax-free for non-professional investors.
• Taxpayers classified as professional securities traders may have their gains taxed as business income, based on criteria such as trading volume, leverage, short holding periods and links to their main occupation.
• Capital gains on real estate in Schaffhausen are usually subject to a separate cantonal real estate gains tax, calculated on the difference between sales proceeds and acquisition/investment costs, with rates that often depend on both the holding period and the size of the gain.

The distinction between private and professional investment activity is often decisive and may require case-by-case assessment and documentation.

Income from Self-Employment and Partnerships

For self-employed individuals and partners in partnerships operating in Schaffhausen:

• Business profits are taxed as ordinary income at federal and cantonal/communal level in the hands of the owner or partners.
• Only business-related expenses are deductible; private living expenses remain non-deductible even if they are paid from business accounts.
• Mixed-use assets (for example, vehicles, home offices or properties used both privately and for business) must be allocated between private and business use on a reasonable and consistent basis.
• Losses can generally be carried forward within statutory time limits and offset against future business profits.

Where intra-group services, intellectual property or cross-border activities are involved, advance clarification with the Schaffhausen tax authorities or formal rulings may be appropriate.

Employee Participation Plans, Bonuses and Severance Payments

Even though Schaffhausen is a smaller canton, modern remuneration systems are common and can involve specialised tax rules:

• Employee share and option plans are taxed based on federal rules and cantonal practice on valuation and timing (taxation at grant, vesting or exercise, depending on the plan design).
• Long-term incentive plans (LTIs), RSUs and other equity-based awards, especially where granted by foreign group entities, often require workday-based allocation of income between Switzerland and other countries.
• Bonuses and severance payments can, in some circumstances, receive a different tax treatment from regular salary, particularly where they compensate for loss of employment or future earnings.

For cross-border employees and international assignees, both Schaffhausen practice and applicable double tax treaty provisions must be considered to avoid double taxation.

Pensions and Retirement Income

For residents of Schaffhausen, pensions and other retirement-related income may involve special considerations, especially where multiple pension schemes or foreign pensions are involved:

• Benefits from the 2nd pillar (occupational pensions) and pillar 3a are taxed differently depending on whether they are taken as annuities or as lump-sum payments.
• Lump-sum withdrawals from pension schemes are usually taxed separately at preferential rates at both federal and cantonal level.
• Foreign pension income may be taxable in Switzerland, abroad or both, depending on the applicable double tax treaty, with relief typically provided via exemption with progression or tax credit mechanisms.

For individuals with pension rights in multiple countries, the timing, sequencing and form of withdrawals can have a significant impact on the overall tax burden in Schaffhausen.

Real Estate in Schaffhausen

Ownership and transfer of real estate in Schaffhausen are subject to specific cantonal rules:

• The imputed rental value of owner-occupied property, or actual rental income for rented property, must generally be declared as income. Deductions for mortgage interest and maintenance expenses are typically available under cantonal guidelines.
• Real estate gains tax is levied on profits realised on the sale of property in Schaffhausen. Tax is usually calculated separately from ordinary income tax, with the rate depending on both the size of the gain and the holding period.
• A real estate transfer tax and notarial/land registry fees may apply when property changes ownership; these should be considered in transaction planning.
• Non-resident property owners are typically subject to limited tax liability and may have filing obligations in Schaffhausen even if they reside elsewhere in Switzerland or abroad.

For major property investments or disposals, advance calculations from the tax authorities and careful documentation of acquisition costs, improvements and holding periods are advisable.

International Double Taxation and Relief

Where taxpayers have income or assets in more than one country, the interaction between Schaffhausen tax law, federal rules and double tax treaties becomes decisive. Common constellations include:

• Residence in Schaffhausen with employment or business activities abroad,
• Foreign investment income or foreign real estate,
• Pensions and other retirement income from several countries.

Relief mechanisms may involve:

• Exemption with progression,
• Tax credit methods, and
• Treaty-specific provisions for employment income, pensions, directors’ fees and other items.

The actual relief granted depends on the treaty wording and the taxpayer’s circumstances, including residence status, sources of income and the allocation of taxing rights between states.

Practical Guidance

The special rules discussed on this page show that Schaffhausen income taxation can become significantly more complex in situations involving:

• Moves into or out of the canton,
• Cross-border commuters and cross-canton work,
• Withholding tax and subsequent ordinary assessments,
• Self-employment, partnerships and small or family businesses,
• Real estate ownership and real estate gains tax in Schaffhausen, and
• Foreign pensions and multi-jurisdiction investment structures.

In such cases, obtaining personalised advice and, where appropriate, clarifying the treatment with the tax authorities in advance is often advisable. The other sections of the Schaffhausen income tax guide – Rates, Deductions, Filing Requirements and Examples – provide the general framework within which these special rules operate.