If anyone has been in a similar situation, appreciate the input:

I was here as an expat from the US on a 3 year assignment (arrived in December 2010). In June 2011 my company restructured and cut my position with employment ending in August. I have been searching for employment and plan to remain in Switzerland if possible from a work perspective.

From a tax standpoint, my employer wants to structure the severance agreement so that I would pay US taxes on the severance pay and be responsible for any Swiss tax liability on the severance payment if I remain in Switzerland. If I move back to the US and still incur a Swiss tax liability, they will cover it. As I was on a tax equalization program when I took on the original assignment, my perspective is that all income generated due to the company should be tax equalized, not just the portion related specifically to the assignment, and it shouldn't be dependent on whether I move back or not. The payment is large enough that I am concerned about the impact of double taxation.

- How does Switzerland view severance pay from the US and how would it be taxed in Switzerland?

- How do I ensure that I don't go through double taxation in US and Switzerland?

- Does residency or domicile when you receive the actual severance payment, make a difference in how and where it's taxed?

Any input from tax consultants or someone who has gone through a similar situation and their learnings, things I should look out for, would be appreciated.

If your living in CH your liable to Swiss income tax on your world wide income & wealth tax on your world wide assets. You will get a credit for any Swiss taxes paid when calculating your US liability

The severance is usually specified already before you begin the contract along with tax issues.

Thanks for the input. Unfortunately (or fortunately), the severance and tax implication was not outlined in the contract.