Hello,

I would like to know if anyone has experience regarding the tax calculation in case both married couple work:
- It's clear that both are taxed at source at rate A (single person tax) every month
- I have been told that at the year end, tax authorities will club the total earnings of the couple and will find the corresponding tax rate B(as 'married')
Is it right? I made a some calculations and found that this way that taxes are far more than paying individually as Singles!!

Thanks for your clarifications in this regard or how's it possible to avoid this situation.

Correct.

Not correct. Rate B only applies to married couples where only one of the two spouses works (when the initial taxation takes place that is).

Thanks, but I would like to know what happens at year end because in the tax directive booklet, it's written that taxes will be corrected by tax authorities by looking at the combined income of two.

What's meant by correction here - we need to pay more or will get some refund!

Thanks!!

It's corrected using the B rate (adjusted for the number of children). Considering the B rate is lower than the A rate you should then get a refund... unless the combined income for the spouses bumps you in a different tax bracket and you then need to pay the difference

Without figures no one could really answer your question accurately...

Try this link .... http://www.estv.admin.ch/e/dienstlei...uerrechner.htm

Actually you take any figures and the tax rate (B) after combining the spouses income is much higher than the individual tax rate (A) on their respective incomes.

For ex. both are earning 100,000 per yr, and their individual tax rate (A) is 17.55% according to bareme 2008, which is 17,550. Total income tax = 17,550 X 2 = 35100.
Now, if you look other way round, their collective income is 200,000 so the tax rate for married (B) is 21.85%, comes out to be 43,700.
I, personally, don't think this is the way taxes are calculated for married working couples taxed at source. Also, they can't fill the full tax return with all deductions etc, so what's the criteria employed by tax authorities to do the tax correction.

Yep, that's about right.

Well, so how do you think they are calculated then?!

Just because you don't like it doesn't mean it's wrong. The criteria are very simple - add the two incomes together, and apply the tax rate. Any deductions such as number of kids or payment into 2nd pillar are taken into account if you fill in the proper form.

By the way, yes, in Switzerland married couples pay more than unmarried couples - it is not something only taxed at source foreigners have to put up with. Income splitting has gone down the drain on the federal level, and on the cantonal level there's no talk of splitting yet.

It depends on the Kanton.
In Argovie, they do an integral split, so in your example if 17.5 % is A rate for 100K, then 17.5% is B rate for 200K. Same rate apply for the town taxes.
Where we still get hit hard is on the Bundesteuer, which is like for us 2.5 times what we would pay if not married (about 10K instead of 2K*2).

Next year, the Bundesteuer will drop a bit (we will pay about 8K instead of 10, which is still double...)

I got to know that a deduction for second earner is also possible.