In application of article 23 of the Vienna Convention of 18 April 1961 on diplomatic relations (RS 0.191.0), a foreign State that acquires property is exempt from registration fees, from all Swiss taxes (federal, cantonal and local) on income and assets and from the supplementary property tax, to the extent that :
- the property is directly required for official use (chancellery, residence of the Head of Mission), and that
- the foreign State is the effective owner of the property.
Under the terms of article 23 of the Vienna Convention, a foreign state which acquires property allocated directly to official use and/or of which it is the owner, is not exempt from taxes imposed in remuneration of specific services rendered.
Exemption from taxes and duties
A foreign state which acquires a property for official use and of which it is the effective owner is exempt from the following duties and taxes:
- Registration fees: the signing of a sales contract is subject to registration fees. It is a one-off tax, to be paid by the purchaser, amounting to 3% of the selling price recorded in the deed. Legal reference: Law of Geneva of 9 October 1969 on registration fees (articles 33 and subsequent) (RSG D 3 30).
- Taxes on income and assets: a property is part of the assets of its owner, and also generates income. This income is therefore taxed at the federal, cantonal and local levels. A tax on assets is also applicable at the cantonal and local levels. Legal reference: federal Law of 14 December 1990 on direct federal taxation and the Law of the canton of Geneva of 9 November 1887 on local taxes (RSG D 3 05).
- Supplementary property tax: the canton of Geneva also imposes a supplementary property tax which is a special tax of a real nature calculated on the basis of proportional rates on the value of properties located in Geneva. Legal reference: Law of the canton of Geneva of 9 November 1887 on public taxation (Articles 76 and subsequent).
Selling the property
A foreign State that sells a property used for official functions and located in the Canton of Geneva is not subject to the payment of tax on profits and gains from real estate. Legal reference: Federal law of 14 December 1990 on direct federal taxation (art. 56, let. i; RS 642.11) and law of the canton of Geneva of 23 September 1994 on the taxation of legal persons (art. 9, para. 1, let. h; RSG D 3 15).
Non-exemption from taxes for particular services rendered
A foreign State - that acquires property for official use and of which it is the effective owner - is subject to the payment of taxes imposed in remuneration of particular services rendered. These are as follows :
- fees for the Registry of property: the registry of property is a service of the cantonal administration, the purpose of which is to preserve documents and records of all kinds having to do with property rights. Changes in property ownership must be recorded in the Registry of property and are subject to a fee of 3 ‰ of the price recorded in the deed of sale. Legal reference: Regulations of Geneva of 7 September 1988 determining the amount of fees for the Registry of property.
- specific taxes on equipment.
Real estate company
A foreign State that acquires shares in a real estate company (a public limited company owning real estate), and thereby acquires the use of an apartment, is subject to the payment of all the fees, duties and taxes associated with its acquisition. In these include federal, cantonal and local taxes on income and assets, the supplementary property tax, the registration fees and taxes imposed in remuneration of particular services rendered.
