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Old 01.01.2015, 16:37
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Swiss citizen with expat tax rate?

Has anyone heard of Swiss citizens getting a 30% tax reduction if they have been out of the country for many years?

My husband lived in the US for 17 years and got his citizenship. He spoke with someone at the cantonal office that confirmed that he might qualify for reduced taxes if he can prove that he has in fact lived outside Switzerland.

Does anyone know anything about this? Is it necessary to tell them he is a US citizen? He is a little weird like that.
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Old 01.01.2015, 17:27
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Re: Swiss citizen with expat tax rate?

There's no such thing as an expat tax rate in Switzerland, unless you're referring to the lump sum taxation - which as a Swiss, and presumably working, he anyway doesn't qualify for.
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Old 01.01.2015, 17:47
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Re: Swiss citizen with expat tax rate?

Amanda, Pauschalsteuer deals are negotiated individually. If your husband has already spoken to the cantonal Steueramt, that is the authority he needs to continue speaking to. Anything you hear from other sources - including my post here - should be taken with a grain of salt. Go directly to the source.

Pauschalsteuer is available to wealthy foreigners who do not pursue employment in Switzerland. Swiss citizens who have lived outside Switzerland for 10 years might be eligible for Pauschalsteuer in the first tax year upon return - but I had understood that the deal would expire thereafter for Swiss citizens. I could be wrong, perhaps this has changed. There is also I think (but am not certain) an extension of Besteuerung nach Aufwand when only one of a married pair is a Swiss citizen (and both not working in Switzerland), but I don't really understand the details covering this particular case. Again, go directly to the source, the cantonal Steueramt.

In a nutshell, a person on Pauschalsteuer is taxed on a multiplier of housing and living expenses rather than income - and I believe there is a floor, one must still be contributing a fairly large amount. Pauschalsteuer is a tool to motivate wealthy foreigners to move here - that is, found money for Switzerland - which is why it is not (generally) available to Swiss citizens.


As for the US issue:

Your husband will have to declare his US citizenship to his banks and financial institutions, as these are bound by FATCA.

However, if your husband's situation is such that he is considering Pauschalsteuer it might be that he is in the category where he will owe a fair whack to Uncle Sam even while resident in CH - in which case he really needs professional advise as he plans this move. And by professional advise I mean someone qualified and experienced in both US and Swiss taxation.
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Old 01.01.2015, 22:47
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Re: Swiss citizen with expat tax rate?

Ok, then I have no clue what he is talking about. I will just let him figure it out.

We did take care of all our FATCA stuff. He will tell the proper people he is a dual citizen only if it is absolutely necessary. He's a bit of an ass that way.

Thank you for all your helpful information.
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