1. Scope of Taxation

Nonresidents are subject to limited tax liability in Vaud on assets situated in the canton. This typically includes:

• Real estate and land located in Vaud
• Business assets attributable to a Vaud permanent establishment
• Equity in Vaud-based partnerships

Movable property (e.g., bank accounts, securities held outside Switzerland) is excluded from Vaud wealth tax for nonresidents.

2. Valuation of Swiss-Situs Assets

Vaud uses the same valuation principles for nonresidents as for residents:

• Real estate: official fiscal value (valeur fiscale) as of 31 December
• Business assets: Book value or practitioner method for equity interests
• Mortgages: Deductible if contractually linked to the Swiss property

3. Debt & Allocation Formula

Switzerland applies a proportional allocation of debt and interest between Swiss and foreign assets. The same principle applies in Vaud to avoid double counting.

Formula:

Deductible debt = (Swiss taxable wealth ÷ worldwide wealth) × total personal debt

This ensures that only the portion economically linked to Vaud assets reduces the cantonal base.

4. Filing Obligations

Nonresidents owning property or other taxable assets in Vaud must file a limited Vaud tax return. The filing is required even if rental income or net yield is minimal.

• File through the Administration Cantonale des Impôts using the limited liability form.
• A Swiss correspondence address or tax representative is mandatory.
• Declare only Swiss-situs wealth and associated debt.

5. Double Taxation Treaties

Switzerland’s network of double tax treaties (DTTs) governs the allocation of taxing rights. For wealth tax, treaties typically assign the right to tax immovable property to the state where the property is located — i.e. Switzerland (Vaud).

• The treaty country of residence generally exempts or grants a credit for Vaud wealth tax.
• Income tax allocation follows separate rules — consult the relevant DTT article (usually Art. 22 or 23 OECD model).
• Documentation: Provide proof of foreign residence and DTT eligibility to the Vaud tax office if requested.

6. Sale or Transfer of Vaud Property

Nonresidents selling Vaud property are subject to real estate capital gains tax at cantonal level. This is separate from annual wealth tax and based on holding period and gain.

• Capital gains tax is withheld at source on sale.
• Final assessment follows after the commune reviews declared costs.
• Future wealth tax ceases as of the sale date.

7. Example: Nonresident with Chalet in Vaud

Excludes income tax and church tax; rounded illustration only.

8. Advisory Takeaways

• Keep mortgage and valuation evidence aligned with official fiscal values.
• Apply for extensions early through a Swiss representative.
• Check your DTT’s wealth tax article for potential credits or exemptions abroad.
• Ensure proper declaration of sale to close Swiss tax exposure cleanly.