The Swiss Confederation, the cantons, and the communes all levy taxes on income or profits. Periodic federal, cantonal, and communal taxes also are charged against capital values belonging to corporations and other corporate entities. The cantons all levy wealth taxes based on individual net assets, stamp duties, taxes on entertainment or admissions, and special charges for educational, social, and sanitary services. Most cantons also levy a tax surcharge on members of certain major churches for the support of those religions. Localities may impose taxes on land, rents, and entertainment, as well as a head tax and a dog tax.
Federal tax is levied on income at rates ranging from 1% to 13% on net incomes between SwFr 20,800 and SwFr 659,000. Anything above SwFr 556,500 for individuals and SwFr 659,000 for married taxpayers is taxed at a flat rate of 11.5%. Various deductions and personal allowances are granted according to circumstances. Those between the ages of 20 and 50 who do not fulfill their military obligation are liable for an additional tax. Cantonal and communal taxes are generally imposed at progressive rates. In 1995 Switzerland replaced its old system of taxing turnover with a value-added tax similar to those of its European neighbors. The VAT (of 6.5% for most sectors) is levied on all deliveries of goods and services, including investments, consumer goods, animals and plants, consulting and entertainment services, license fees, and the sale of rights. The VAT is also levied on imported goods and services. The rationale behind the creation of the new tax system for businesses was that the old system didn't allow companies to deduct the turnover tax on investment purchases-imposing what businesses insisted was a "hidden" tax. There are also miscellaneous federal taxes, such as stamp duties, a value-added tax of 6.5%, and excise taxes.