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Old 09.01.2015, 16:58
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Is it compulsory for employers to deduct correct withholding tax rate?

I am a B-Permit holder, paying withholding tax at source, living and working at different cantons. Because of different tax rates, my employer deducted too much withholding tax, actually double. I need to do a time-consuming tax correction each year and wait 1.5 years to get back the tax.

A post, which I unfortunately could not find anymore, mentioned that employers must deduct tax correctly from this year. Anyone could confirm that?

The Tax Office at City Zurich said it is true, but my employer replied it knows nothing about this regulation.

Thanks for any clue
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Old 09.01.2015, 17:46
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Re: Is it compulsory for employers to deduct correct withholding tax rate?

As I understand it, the responsibility to pay tax is yours, towards the authority where you live. The employer's responsibility is, for all employees who are not Swiss and have less than a C-Permit, to deduct tax at source.

The employer will consult some tax rules or tables to know how much to deduct, but even this will be a reasonable estimate at best, since you may well have other factors which you could claim as a deduction on that "time-consuming tax correction" (e.g. very high costs for health-related services for a child of yours) about which your employer may have no knowledge. By no knowledge I mean he/she does not know everything tax-relevant in your private life, but also cannot possibly know what else constitutes your income (e.g. the earnings of your spouse) or could deduct.

If the employer has based his/her reasonable guess on the rules of the canton of employment, but using the rules of your canton of residence would make more sense (= be more realistic) for you, then I'd suggest you ask the Zurich Tax Office to give you a copy of the exact Regulation which confirms that that's what the employer must do. And then you could take that document to the Tax Office in the municipality where you work, and ask them if, in the light of that, they have a Regulation, or a Checklist, which would explain to your employer what to do about deductions for "ausserkantonale" (out-of-canton) B-Permit employees.

After all, you are certainly not the first one.
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Old 09.01.2015, 17:48
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Re: Is it compulsory for employers to deduct correct withholding tax rate?

Shitty situation to be in, sorry to hear it.

Have you tried to go to your local tax office for advice? They would be able to find any regulation. If that doesn't work, there must be the equivalent of citizen's advice bureau in Switzerland for issues like that where you might get a second opinion.

But after all that, what outcome are you aiming for? I am sure your employer won't be liable to pay you anything and any delays from the Zurich tax office can't be rushed as they are awful with the time they take with everything.

I think it's just one of those things you'll have to resolve and forget. Think of it as an extra bonus next year when you get it back
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Old 12.01.2015, 14:15
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Re: Is it compulsory for employers to deduct correct withholding tax rate?

It totally make sense for the employers to ignore personal situations, such as baby care, further education etc., when calculating the tax rate. In this sense, I anyway need to make a tax correction.

I am aim to make the Canton-related tax rate straight with my employer. I offered to give a web link, even a printout, of the tax rate from Zurich, but my employer still does not want to make a change.

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As I understand it, the responsibility to pay tax is yours, towards the authority where you live. The employer's responsibility is, for all employees who are not Swiss and have less than a C-Permit, to deduct tax at source.

The employer will consult some tax rules or tables to know how much to deduct, but even this will be a reasonable estimate at best, since you may well have other factors which you could claim as a deduction on that "time-consuming tax correction" (e.g. very high costs for health-related services for a child of yours) about which your employer may have no knowledge. By no knowledge I mean he/she does not know everything tax-relevant in your private life, but also cannot possibly know what else constitutes your income (e.g. the earnings of your spouse) or could deduct.

If the employer has based his/her reasonable guess on the rules of the canton of employment, but using the rules of your canton of residence would make more sense (= be more realistic) for you, then I'd suggest you ask the Zurich Tax Office to give you a copy of the exact Regulation which confirms that that's what the employer must do. And then you could take that document to the Tax Office in the municipality where you work, and ask them if, in the light of that, they have a Regulation, or a Checklist, which would explain to your employer what to do about deductions for "ausserkantonale" (out-of-canton) B-Permit employees.

After all, you are certainly not the first one.
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Old 12.01.2015, 14:17
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Re: Is it compulsory for employers to deduct correct withholding tax rate?

I will ask the tax office again whether there is a change in regulations this year. Anyway, I will get my "extra bonus" back.
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Shitty situation to be in, sorry to hear it.

Have you tried to go to your local tax office for advice? They would be able to find any regulation. If that doesn't work, there must be the equivalent of citizen's advice bureau in Switzerland for issues like that where you might get a second opinion.

But after all that, what outcome are you aiming for? I am sure your employer won't be liable to pay you anything and any delays from the Zurich tax office can't be rushed as they are awful with the time they take with everything.

I think it's just one of those things you'll have to resolve and forget. Think of it as an extra bonus next year when you get it back
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Old 12.01.2015, 14:17
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Re: Is it compulsory for employers to deduct correct withholding tax rate?

Call the tax authorities and ask them to confirm in writing what tax rates / tax bracket should be applied. I got one of those from Steueramt (tax office) Zurich, it was sent to my employer and I received a copy.
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Old 12.01.2015, 14:25
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Re: Is it compulsory for employers to deduct correct withholding tax rate?

Why not take it up in writing with the tax office (of the Kanton where your employer is based I would assume, because you want the amount paid to them returned?) and see what they reply, hoping that they take it up with your company?
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