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Old 17.06.2012, 21:52
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EU-17 resident and working in CH: is rental income from abroad taxed in CH?

Hi,

I'm new to the forum and would like to congratulate for a great forum and thank all members for exchanging valuable information!

Although I tried to find an answer on the forum to my question, I couldn't find it so here it is:

I am renting an office in Lux privately and sub-renting for higher rent to 2 Lux companies. So I'm not the owner of the office building.

But should I declare this rental income in CH on my tax declaration? According to some, rental income from abroad doesn't have to be declared in CH because it shouldn't be taxed, according to others it should be declared but won't be taxed, and according to yet others it should be declared and will be taxed in CH.

Who knows the right answer please?

Thanks in advance!
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Old 17.06.2012, 23:44
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Re: EU-17 resident and working in CH: is rental income from abroad taxed in CH?

ALL your world wide earnings and capital are (Lightly) taxed in Switzerland.
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Old 17.06.2012, 23:52
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Re: EU-17 resident and working in CH: is rental income from abroad taxed in CH?

Hi,
I have the very same situation. That's how I cope with that.
My home country requires me to pay taxes in the country where the income is produced and therefore I have to pay taxes on the rental income.
I file the Swiss tax declaration stating l that I own the property, I rent it out (show copy of the contract) and that I pay taxes on it (show tax declaration). As there is a special treaty between the two countries, the taxes paid abroad are accounted for and as the amount is by far higher than what I would pay in Switzerland for the same income I am not additionally taxed here on that portion of income.
The property is accounted for in the wealth and therefore I am taxed on that.

If I understood it right there is no universal rule: depends on local rules and treaties.
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Old 18.06.2012, 17:04
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Re: EU-17 resident and working in CH: is rental income from abroad taxed in CH?

Thank you Sbrinz and Cinzia_t!

I know a CH resident is taxed on wordwide income, but I thought rental income from abroad was exonerated just like long term capital gains.

I guess I'll have to ask a CH accountant to calculate how much tax I'll have to pay on this rental income. Or are there CH accountants on EF willing to give the answer?
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Old 28.03.2015, 18:20
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Re: EU-17 resident and working in CH: is rental income from abroad taxed in CH?

Despite searching, this was about the only thread that came close to my problem.

My truehand adds about 12K to my income each year to represent the theoretical income of my property outside Switzerland. Allowances are made for debts and about 10% is allowed for general expenses on the "rental value". In addition the property value is added to my asset for wealth tax but the tax on this is small.

Now I'm actually renting the property, I now will make a tax return and pay tax in that country but can't file that until May when the forms are issued. I barely break even renting it but at least it covers the costs, which is the important thing.

Despite providing details of the rental income, my tax return in Switzerland has again been prepared with the same 12K of deemed rental income. Surely this means I pay tax twice? How can you show the Swiss you are already declaring a rental income and paying tax on it in another country when the tax returns are done at different times in the year? Is this balanced out in future years when I can show the proof?

There must be people who do this every year so wondering how it works. Any advice appreciated. I've asked my truehand but can't get an understandable answer.
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Old 28.03.2015, 20:19
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Re: EU-17 resident and working in CH: is rental income from abroad taxed in CH?

If there is a double tax treaty between Switzerland and the country where the real estate is, then the treaty normally will say that the income is taxed in the place the real estate sits.

However, the income from real estate outside Switzerland still has to be declared on the tax return.

It is used to determine your tax rate on the progressive tax tables...but you don't actually pay tax on it in Switzerland.

You are not asked for proof that you paid tax elsewhere. Your Treuhand should just be adding a note to the return stating something like "income from real-estate in Country YYY is taxed in YYY under the Double Tax Treaty between Switzerland and YYY"
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Old 28.03.2015, 22:19
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Re: EU-17 resident and working in CH: is rental income from abroad taxed in CH?

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If there is a double tax treaty between Switzerland and the country where the real estate is, then the treaty normally will say that the income is taxed in the place the real estate sits.

However, the income from real estate outside Switzerland still has to be declared on the tax return.

It is used to determine your tax rate on the progressive tax tables...but you don't actually pay tax on it in Switzerland.

You are not asked for proof that you paid tax elsewhere. Your Treuhand should just be adding a note to the return stating something like "income from real-estate in Country YYY is taxed in YYY under the Double Tax Treaty between Switzerland and YYY"
This is what I would expect and as you say only effect the rate of tax. Yes, there definitely would be an agreement as it's an EU country. I feel he has maybe got this one wrong so if I can't get anywhere with him, I'll contact the tax people directly and ask. At the moment there is absolutely nothing declared on the tax return that shows I am declaring income and paying tax in another country.
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Old 29.03.2015, 23:39
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Re: EU-17 resident and working in CH: is rental income from abroad taxed in CH?

First of all you do have to declare it, regardless of whether you will pay tax on it or not.

The rental income will be included in your total income to calculate your overall tax rate, but if you pay tax on it you won't be taxed on it here.

For example..

Income in Switzerland CHF100K
Income abroad CHF10K

Your overall tax rate will be calculated based upon total income of CHF110K, but then that rate will only be applied to the CHF100K income in Switzerland.
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Old 30.03.2015, 21:03
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Re: EU-17 resident and working in CH: is rental income from abroad taxed in CH?

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First of all you do have to declare it, regardless of whether you will pay tax on it or not.
Yes, I know. The question was actually why should my Truehand have not declared the value I gave him and used some other notional value instead. The fact that the real rental income is declared and taxed elsewhere is missing from the tax return. Hence my confusion.
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