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Old 05.02.2009, 02:25
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Tax: Changing Commune/Municipality/Town in Canton Zurich

Need your help, English Forum!

Changing towns within the Canton (in my case, Canton Zurich)

Fact or Myth:
1. Is annual income taxation at the municipal level/rate is based on the town/commune/municipality in which you were first registered during the year? (ie Jan 1, 2008 for tax year 2008).
Or is it assessed based on the town/commune/municipality in which you are registered at year-end, (ie Dec 31, 2008 for tax year 2008.)

2. Tax benefits of living in a cheaper town/commune/municipality (ie Zurich's gold coast towns, etc. vs Zurich city center) are not available to B-Permit holders. Fact/fiction? First hand experience in the matter?

Making final decision on moving from Zurich-center to lower-tax gold-coast town on lake zurich with contract signature by Friday. So your input is most appreciated!
Thanks!
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Old 05.02.2009, 10:16
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Re: Tax: Changing Commune/Municipality/Town in Canton Zurich

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Need your help, English Forum!

Changing towns within the Canton (in my case, Canton Zurich)

Fact or Myth:
1. Is annual income taxation at the municipal level/rate is based on the town/commune/municipality in which you were first registered during the year? (ie Jan 1, 2008 for tax year 2008).
Or is it assessed based on the town/commune/municipality in which you are registered at year-end, (ie Dec 31, 2008 for tax year 2008.)

2. Tax benefits of living in a cheaper town/commune/municipality (ie Zurich's gold coast towns, etc. vs Zurich city center) are not available to B-Permit holders. Fact/fiction? First hand experience in the matter?

Making final decision on moving from Zurich-center to lower-tax gold-coast town on lake zurich with contract signature by Friday. So your input is most appreciated!
Thanks!

1. If you are a C permit holder or Swiss, then yes you pay tax for the full year where your tax residence is at the end of the year, as long as both cantons are on the postnumerando system, which I believe now all are.

BUT, if you are a B permit holder subject to tax at source, then you need to check if Kreisschreiben 14 of 6/7/01 is still in effect (I'll have a look too) as this makes quellensteuer payers liabile prorata temporis in the canton of residence. This is clearly flagrant discrimination, but that's Switzerland for you.

If there is a lot of money at stake you should get some professional advice.

2. You can do comparisons at www.homegate.ch if you go to "kaufen" tab and then choose "steuerrechner" on the left menu. It can make a BIG difference if you have taxable assets and a big enough salary so that it offsets the higher rents. To help you out Wollerau of Pfäffikon in Schwyz are the very cheapest. In Zurich Küssnacht is not bad.

BUT, if you American national dont you end up paying the same because you are taxed in the USA anyway, so net net you just pay more to Uncle Sam and less to Switzerland.

You really should again get pro advice.

Daniel

Last edited by dannyt986; 05.02.2009 at 10:20. Reason: Additional thoughts.
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Old 05.02.2009, 16:14
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Re: Tax: Changing Commune/Municipality/Town in Canton Zurich

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1. If you are a C permit holder or Swiss, then yes you pay tax for the full year where your tax residence is at the end of the year, as long as both cantons are on the postnumerando system, which I believe now all are.

BUT, if you are a B permit holder subject to tax at source, then you need to check if Kreisschreiben 14 of 6/7/01 is still in effect (I'll have a look too) as this makes quellensteuer payers liabile prorata temporis in the canton of residence. This is clearly flagrant discrimination, but that's Switzerland for you.

If there is a lot of money at stake you should get some professional advice.

2. You can do comparisons at www.homegate.ch if you go to "kaufen" tab and then choose "steuerrechner" on the left menu. It can make a BIG difference if you have taxable assets and a big enough salary so that it offsets the higher rents. To help you out Wollerau of Pfäffikon in Schwyz are the very cheapest. In Zurich Küssnacht is not bad.

BUT, if you American national dont you end up paying the same because you are taxed in the USA anyway, so net net you just pay more to Uncle Sam and less to Switzerland.

You really should again get pro advice.

Daniel
Daniel, Many Many thanks!
That's a great response. I'm trying to figure out how to "thank you" on this EnglishForum thread.

To the point, for the benefit of others in the Forum, I've just spoken to 2 tax professionals (Big5 global accounting firm + local small Swiss tax firm in zurich suburbs) + a zurich property owner with real estate in Zurich Center + tax shelter Herrliberg, and they were all clear in the rule:
1. Commune/town/municipal tax rates are based on the address you live at on January 1 of the year. So Jan1, 2009, defines the local rate you will pay for all earnings/assets in 2009. Any move WITHIN the canton, will not change this.
- Moving to a town with lower tax rate (ie Zurich center to Kusnacht), you will pay the higher Zurich rate where you lived on Jan1.
- Moving to a town with a higher tax rate (ie Kusnacht to Zurich center), you will still pay the lower Kusnacht rate for all of 2009! (take note for next year!)
2. If you move between 2 cantons, then the canton (+town, obviously) tax rates will be based on the address you have at the END of the year on Dec31. So moving+registering to Canton Zug in Dec will change your entire year's taxation basis for the previous 12 months to the new canton (Zug) where you live on Dec31.

Daniel, if you can find anything more on this "Kreisschreiben 14 of 6/7/01", I would love to discover a way to more appropriately be exposed to tax rates based on a more logical pro-rated method, ie by registeration date at the local gemeinde, as I'm moving to a tax-beneficial town.

Oh, and re: the US, IRS, and Uncle Sam chasing American's greenbacks globally: You're not far off. Incomes below 87k USD don't owe anything back to the US, if tax has been paid locally on that income (ie to Switzerland). Above 87k USD, Uncle Sam resumes taxing those with US citizenship at the appropriate normal rates that one would pay for each dollar above 87k if they lived in the US. So, unfortunately, yes, a rare form of double-taxation. But savings on Swiss taxation still keeps those chf's in your pocket.

Thanks again for the quick and intelligent post. Was really helpful on my path to understanding this mess, Daniel.
Washbrol
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Old 05.02.2009, 16:37
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Re: Tax: Changing Commune/Municipality/Town in Canton Zurich

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Thanks again for the quick and intelligent post. Was really helpful on my path to understanding this mess, Daniel.
Washbrol
You are welcome, once youve done a few more (tot 10?) posts thanxs and groan buttons appear against each post.

You are right within the canton it is all a black box and they just share out your dosh in the background.

D
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Old 05.02.2009, 16:41
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Re: Tax: Changing Commune/Municipality/Town in Canton Zurich

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Daniel, if you can find anything more on this "Kreisschreiben 14 of 6/7/01", I would love to discover a way to more appropriately be exposed to tax rates based on a more logical pro-rated method, ie by registeration date at the local gemeinde, as I'm moving to a tax-beneficial town.
This will also only apply to intercantonal moves I suspect, I had a look at etstv.ch the federal tax authorities but couldnt find it. But it definitely existed in 2002 and cost me a bucket load of money moving from NE to SZ. Any of the advisors should immediately know if it still exists.. or if it's been repealed Id love to know the grounds, maybe I can go back an claim my money back.

D
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Old 05.02.2009, 22:59
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Re: Tax: Changing Commune/Municipality/Town in Canton Zurich

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This will also only apply to intercantonal moves I suspect, I had a look at etstv.ch the federal tax authorities but couldnt find it. But it definitely existed in 2002 and cost me a bucket load of money moving from NE to SZ. Any of the advisors should immediately know if it still exists.. or if it's been repealed Id love to know the grounds, maybe I can go back an claim my money back.

D
Taxes used to be pro-rated for inter-cantonal moves. But that was complicated, requiring 2 or more tax returns (one for each canton, where you lived during the year). Some years ago (not sure when), the authorities simplified the process.

Prevailing rule for inter-cantonal moves: Domicile Canton and Commune on 31st December 2008, gets the tax return and collects taxes for the whole year 2008.

Intra-cantonal move within Canton Zurich: The domicile commune on 1st January 2008 collects taxes for the entire 2008.
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Old 05.02.2009, 23:13
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Re: Tax: Changing Commune/Municipality/Town in Canton Zurich

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Taxes used to be pro-rated for inter-cantonal moves. But that was complicated, requiring 2 or more tax returns (one for each canton, where you lived during the year). Some years ago (not sure when), the authorities simplified the process.

Prevailing rule for inter-cantonal moves: Domicile Canton and Commune on 31st December 2008, gets the tax return and collects taxes for the whole year 2008.
Yes, that's what I naively thought in 2001... a year where the new rules you describe definitely applied to those subject to direct taxation (ie Swiss or C permit) but not to quellensteuer. I got advice from two very good Zurich tax firms. Unless Kreisschreiben 14 was revoked care still needed.. I might call the tax office and ask.

Daniel
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Old 05.02.2009, 23:22
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Re: Tax: Changing Commune/Municipality/Town in Canton Zurich

Ive tracked it down

http://www.steuerkonferenz.ch/pdf/ks_14.pdf in german

http://www.steuerkonferenz.ch/pdf/ci_14.pdf in french

as far as I can see its still valid. It makes a clear distinction between ordinary direct tax and quellensteuer systems. The latter is still time apportioned.

Daniel
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Old 04.08.2015, 13:48
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Re: Tax: Changing Commune/Municipality/Town in Canton Zurich

Just picking this thread up with one more question!

Basically i now understand that if i move from Zurich to Zug during the year, i pay my full tax bill as if i was living in kanton zug the entire year. As i am a B permit holder I also pay quellensteuer, which as i understand is pro-rated and not based on where you live 31 December.

If i earn more than 120k, will my tax filing that I have to file rectify my quellensteuer payments?

Also, if i had a baby (means reduction in my taxes) are those taxes pro rated for the year or treated as all of the year like above?

Many thanks in advance,
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Old 03.11.2015, 22:11
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Re: Tax: Changing Commune/Municipality/Town in Canton Zurich

I don't suppose you got the recent info on this?
i.e. is Quellensteuer pro-rated based on the time spent in each kanton?
And is this rectified, if you earn over 120k, and have to fill in a full return?
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Old 04.11.2015, 08:36
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Re: Tax: Changing Commune/Municipality/Town in Canton Zurich

I moved Kanton in 2013 (B permit, Quellensteuer, tax return), and my tax was based on the 31 December Kanton. Took a while for the tax adviser to sort out - they told me the regulation had only recently been clarified and Kantons were not quite up to speed on it.

Hopefully two years later they've had time to work out a process
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Old 04.11.2015, 08:59
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Re: Tax: Changing Commune/Municipality/Town in Canton Zurich

Thank you.

Last question (before I go and speak to an advisor):

Do you know if the quellensteuer is based on the expected tax band on an annualised salary?

I worked part year as a freelancer in a low tax Canton, took a few months off, now earning much less in a medium tax kanton, wondering if I should expect a big tax bill :s
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