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Old 21.11.2011, 19:11
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Changing from tax "at source" to "ordinary" - what to expect & when

Right, so without wanting to recount a long history, my husband moved to Switzerland midway through this year. He is now working remotely for a New Zealand company which has no offices outside of NZ and his salary is paid into a NZ bank account.

Before he left NZ he changed his tax status to non-resident and so pays no NZ income tax.

When he arrived we visited the Fribourg tax office and were told we just had to wait and there was nothing we needed to do for the taxes (we checked this numerous times!).

Throughout this time I have been earning my usual salary and have been taxed at source - at varying rates as the University keeps changing their mind as to which box I fall into and how to deal with my husbands working situation.

After much debate, document-sending and waiting, we have now been told that I will no longer be taxed at source - in fact they are reimbursing me all of my tax paid since the middle of the year! - and that we will both have to pay "ordinary tax" at the end of the year.

In the interested of preparation and education, can anyone tell me when (or indeed if) we will be notified about what taxes need to be paid. I guess that this means we need to file a tax return, but we have no experience with such beasts. How long would we usually have to tackle it before we would be fined for late payment?

But perhaps most importantly can anyone suggest anything we should think about doing or preparing in advance to be as organised as possible?

Yes, I might sound a little panicky or obessed with being prepared, but I am finding the system in Switzerland very confusing and the last thing I want to have happen is for a massive orange slip to arrive demanding payment by yesterday!

Thanks in advance!

EDIT: Yes, I have trawled through previous threads (so many unhelpful thread titles: "advice please", "tax question"...), but most of it discussed the tax return itself (I am now well informed about Zurich tax returns) and no tips/ideas about what to do beforehand.

Last edited by kiwigeek; 21.11.2011 at 19:16. Reason: more info
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Old 22.11.2011, 00:12
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Re: Changing from tax "at source" to "ordinary" - what to expect & when

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Right, so without wanting to recount a long history, my husband moved to Switzerland midway through this year. He is now working remotely for a New Zealand company which has no offices outside of NZ and his salary is paid into a NZ bank account.

Before he left NZ he changed his tax status to non-resident and so pays no NZ income tax.

When he arrived we visited the Fribourg tax office and were told we just had to wait and there was nothing we needed to do for the taxes (we checked this numerous times!).

Throughout this time I have been earning my usual salary and have been taxed at source - at varying rates as the University keeps changing their mind as to which box I fall into and how to deal with my husbands working situation.

After much debate, document-sending and waiting, we have now been told that I will no longer be taxed at source - in fact they are reimbursing me all of my tax paid since the middle of the year! - and that we will both have to pay "ordinary tax" at the end of the year.

In the interested of preparation and education, can anyone tell me when (or indeed if) we will be notified about what taxes need to be paid. I guess that this means we need to file a tax return, but we have no experience with such beasts. How long would we usually have to tackle it before we would be fined for late payment?

But perhaps most importantly can anyone suggest anything we should think about doing or preparing in advance to be as organised as possible?

Yes, I might sound a little panicky or obessed with being prepared, but I am finding the system in Switzerland very confusing and the last thing I want to have happen is for a massive orange slip to arrive demanding payment by yesterday!

Thanks in advance!

EDIT: Yes, I have trawled through previous threads (so many unhelpful thread titles: "advice please", "tax question"...), but most of it discussed the tax return itself (I am now well informed about Zurich tax returns) and no tips/ideas about what to do beforehand.
Does one of you have a C Permit or are one of you a Swiss citizen?

Anyway to your original question. The taxing authorities, at least in Canton Zug, ask you to file a tax return by a certain date. After you
fill out the tax return, you will receive a bill for the tax. If you don't
have the money immediately, you can work out a payment plan.

It is not such a big deal here in Zug at least. You can usually get
a tax advisor for relatively inexpensive.
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Old 22.11.2011, 15:31
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Re: Changing from tax "at source" to "ordinary" - what to expect & when

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Does one of you have a C Permit or are one of you a Swiss citizen?
Nope - We are both non-EU + I am a B permit holder (officially student B), and he is a dependent B permit holder....so the situation is a bit unusual it seems....although it makes me feel more Swiss having to pay my tax the same the locals

So seems to be that we just wait for them to send out the forms.

What a shame, if it hadn't been for my employer messing with my tax rate since I got married, they never would've noticed hubby (and yes, we had filled out all necessary forms and obtained work permission)! But alas, Switzerland is no longer our tax haven.
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Old 22.11.2011, 17:56
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Re: Changing from tax "at source" to "ordinary" - what to expect & when

May I add the following comments.

Your husband's income will be ordinary taxed in Switzerland (the technical term used for this is supplementary ordinary taxation). This is due to the fact that he has no Swiss employer, who could deduct the taxes at source. Therefore this income must be declared in the tax return and will subsequently be ordinary taxed.


Please notice, that my underlying assumption is that your husband does physically work in Switzerland because otherwise the taxation rights of Switzerland and other involved "working countries" would need to be further investigated.

Bear also in mind, that if your husband is working for a "formal" employer in New Zealand but a Swiss client benefits from the working results and instructs your husband, the Swiss Client and not the New Zealand employer could be seen as the employer according to tax law, which would result in a Swiss source tax obligation for the Swiss client.

Secondly, income that is in principle taxable at source (because of lack of C permit/lack of Swiss citizenship), such as your salary from a Swiss university, will be ordinary taxed, if it exceeds the threshold of CHF 120'000 (=refers to gross salary) per year.

But even if such an ordinary taxation applies because salary exceeds the said threshhold of CHF 120'000 the source tax still needs to be deducted in a first step and will subsequently be credited against your final tax liability resulting from the tax return you have to file.

However, there is the possibility to avoid the deduction at source in these cases, if the employer provides a sufficient guarantee to the tax authority.

Because your employer did refund your initially paid source tax, this implies to me that your salary exceeds the CHF 120'000 AND your employer provided a guarantee. Otherwhise I can't see any legal reason why your employer stopped to deduct source tax.

For late payment a fine won't be imposed but you have to pay interest for delayed payments. On the other hand you can get fined for not filing the tax return on time. You should receive 2011 tax return during March 2012. If you don't ge the forms please revert again to the tax authority.

Don't very to much about the upcoming tax return. I am sure you will find someone to support you. However, what certainly helps is to keep prepared at least the following:

salary statement, statement of all your bank accounts/deposits, receipts re contributions to 3rd. pillar (if applicable), receipts re travel to work and other work-related costs (e.g. education costs), which you beared and receipts re substantial cost for self paid medical treatment (e.g. dental costs).

Of course in more complex cases other documents might be relevant (e.g. moving costs if tax payer qualifies as an expat with reference to the tax law).

With kind regards,
conundrum (certified Swiss Tax Expert)
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Old 23.11.2011, 12:25
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Re: Changing from tax "at source" to "ordinary" - what to expect & when

You will normally receive the tax return forms sometime in February. For someone who is employed normally, they are usually easy enough to fill in yourself. Things get a bit more complicated if you own property, i.e. the flat or house you live in, but it remains doable (the really confusing thing is the valeur locative / Eigenmietwert).
If you are self-employed it becomes significantly more complicated and it is probably wise to have a professional do it with you, at least the first couple of times, on top of which, they should be able to advise on other issues related to taxation. The same is true if own other property, property in different cantons, have more complicated financial affairs, etc.
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