Nonresidents are subject to Appenzell Innerrhoden wealth tax on assets that are economically connected to the canton. This limited tax liability applies mainly to real estate or business assets located in the canton, while foreign portfolios and movable property held abroad are not taxed in Appenzell Innerrhoden.

This guide outlines the scope, valuation methodology, and compliance obligations for the 2025 tax year, focusing on nonresident owners of Swiss property.

1. Scope of Limited Tax Liability

A nonresident becomes liable for wealth tax in Appenzell Innerrhoden if they hold any of the following:

• Residential or commercial real estate located in Appenzell Innerrhoden
• Land plots (including agricultural land) situated within the canton
• Permanent establishments or business operations (e.g., workshops, hotels, restaurants) in the canton
• Business assets allocated to an Appenzell Innerrhoden branch or place of effective management

Foreign assets (bank accounts, securities, overseas real estate) remain outside the Appenzell Innerrhoden tax base, although they may affect taxation in the country of residence.

2. Valuation Basis

Appenzell Innerrhoden applies cantonal valuation rules for wealth tax that are broadly harmonised with federal guidance:

• Real estate: Cantonal tax value (Steuerwert), generally below full market value
• Movable wealth: Bank deposits and securities at year-end tax value based on official ESTV lists
• Business assets: Book or fair value according to Swiss accounting standards
• Pension assets: Claims against 2nd pillar and 3a schemes remain tax-exempt until payout

The Steuerwert for real estate typically reflects a reduced percentage of market value and is determined by the cantonal tax authority. For listed securities, official year-end tax values and foreign exchange rates are used, based on the federal tax value lists. For more technical detail within this canton, see Valuation Rules.

3. Debt Allocation

For nonresidents, Appenzell Innerrhoden applies the usual Swiss principles of economic allocation of debt:

• Mortgages secured on Appenzell Innerrhoden property are deductible from the property’s taxable wealth.
• Other debts are deductible only to the extent they can be economically linked or proportionally allocated to Swiss assets.
• If Swiss property is held in several cantons, debt is allocated proportionally by the taxable values of those properties.

Interest on deductible debt is considered for income tax purposes, with restrictions based on Appenzell Innerrhoden–sourced income.

4. Allowances & Exemptions

As a nonresident, you generally do not benefit from the full range of personal allowances granted to resident taxpayers. However, certain elements are typically exempt or treated favourably:

• Tax-exempt pension capital (2nd pillar and 3a) until withdrawal
• Household items and normal personal belongings
• Selected social or minimal allowance parameters, where required by harmonised cantonal law

In practice, the main planning levers for nonresidents are valuation and debt allocation rather than personal allowances.

5. Double Tax Treaties

Switzerland’s tax treaties assign the taxation of immovable property to the state where the property is located. This means Appenzell Innerrhoden retains the right to tax real estate located in the canton, even when the owner is resident abroad.

Relief is normally granted in the residence state through:

• Exemption with progression (Swiss tax ignored but wealth considered for rate), or
• Foreign tax credit (Appenzell Innerrhoden tax credited against home-country tax).

Always review how your residence country implements the treaty and ensure that Swiss tax paid is properly documented and claimed.

6. Swiss Tax Representative

Nonresidents must typically provide a Swiss correspondence address or appoint a tax representative for dealings with the Appenzell Innerrhoden tax authority.

• Swiss fiduciaries, tax advisors, or lawyers can act as authorised representatives.
• All notices and assessments are issued in German.
• Using a representative helps avoid missed deadlines and default assessments.

7. Filing & Compliance

Nonresident owners of Appenzell Innerrhoden property file a limited Swiss tax return covering only Swiss-situs assets and related income. The wealth tax component focuses on net assets located in the canton as of 31 December.

• Official confirmation of the property’s tax value (Steuerwert), if available
• Mortgage and loan confirmations as at year-end
• Rental income and expense statements where the property is leased out

Filing deadlines are aligned with resident deadlines in Appenzell Innerrhoden; extensions may be obtained, typically via a Swiss representative.

8. Example — Nonresident Holiday Home Owner

Profile: Resident of Germany, owns a holiday home in Appenzell Innerrhoden.

• Steuerwert: CHF 650,000
• Mortgage balance: CHF 400,000
• Cumulative canton/district/commune multiplier: 1.25 (125 % of simple tax)

Step 1 — Net taxable wealth: CHF 650,000 − CHF 400,000 = CHF 250,000
Step 2 — Simple wealth tax: 1.5‰ of CHF 250,000 = CHF 375
Step 3 — Applying multipliers: CHF 375 × 1.25 = CHF 468.75
→ Effective burden of roughly 0.19 % of net taxable wealth.

9. Ending Appenzell Innerrhoden Tax Liability

Tax liability in Appenzell Innerrhoden ends when the property or business assets in the canton are sold, transferred, or otherwise disposed of. A final limited tax return must be filed and any remaining wealth tax and property gains taxes settled.

Inform the tax authority promptly of the disposal to avoid continued assessments based on outdated ownership data.

10. Planning Insights for Nonresidents

• Confirm the Steuerwert and expected multipliers before acquiring property in Appenzell Innerrhoden.
• Coordinate mortgage structure and debt allocation with your overall cross-border tax plan.
• Check how your residence jurisdiction treats Swiss wealth tax under the applicable treaty.
• Use a Swiss representative to manage filing deadlines, language issues, and correspondence.