Richard,
Many thanks for that excellent and detailed answer. I suspected that there must be some major gains in the company route, and seperation of company revenue from personal income was it.
Many thanks
dave
| Quote: | |  | |
| Okay Dave,
first off you need to understand that there are several ways that you can become "self-employed" although in reality there is only one. Contradiction? Read on.
To be self employed you need to go to the Gemeinde and fill in the AHV self-employed form. At this point you are self-employed and you can (indeed usually must) register your business in the company register. Then you can send out invoices etc. You are freed of the necessity to pay unemployment insurance and can elect to have no pension in which case your income increases substantially along with your tax bill. You can offset many things against your tax though such as part of your accommodation costs to cover a work place at home, your car costs, your computer, telephone etc. But at the end of the day it is still not very tax efficient. An improvement okay but it can be better.
Your ability to accumulate reserves is the major stumbling block and that you are taxed annually on total income with various opportunities missed.
This is the reason many self-employed people want to form their own GmbH. You are then employed but you yourself, within the restrictions imposed by law, determine what you spend the company income on. The key is to understand that your employment costs remain more or less the same as if you were "self-employed" ie AHV, tax etc but now only on your personal income. You do now have to pay ALV 2% but of your income not the company's.
So you could say bill at 150 per hour giving you ca 300K per year total income. You pay yourself 10K per month and this leaves ca 150K per annum. From the 150K you can run a company car usable by all company employees (ie you) save for next year, deduct for all things imaginable and whatever is left you can pay yourself as winnings - subject to tax but not everything else. Furthermore you are able to pay into a pension fund 2nd pillar up to the legal maximum and additionally have a 3rd pillar. You can send yourself on training courses at will and not just specific to your current occupation without needing to demonstrate their relevance. And all this because you are working for a business and not for yourself. The fact that you are the sole owner of the business is more or less irrelevant as legally it is its own person.
Downsides are the necessity to have your books audited but then again if you earn enough you will need to do this as a sole trader as well. You also have the currently ca 13K you need to invest to set it up - A lot of this can be done by pledging your car to the company if you own one. The final downside is the requirement to formally wind up the company once you are finished with it which is a bind but hey you cannot have everything...
Put simply you are much more flexible in what you can do with a GmbH in terms of optimising your tax bill and covering your existence going forward. | |
| | |