I was talking to someone this weekend, and he was moaning about a change in the tax law from Jan next year.
He seems to think that all perks now have to be declared by the employer, ie children’s schooling, travel allowances, company car, housing etc. apparently, the value of these extras must now be declared by the employer at the end of the year. and will be added to the gross salary for taxation.
Has anyone heard about this and is it as bad as it sounds?

Nick.

A Swiss contractor friend mentioned it.

All (or most?) perks must be mentioned on the Lohnausweis (= UK P60)

From an IT contractor perspective:
It makes setting up your own GmBH less attractive.
eg Using a room in your house for your comany etc

I thought it would be more attractive ? As a employer you can allocate your expenses as company or private. The good ones (company meetings in Barbados etc) are "essential" for the health of your business.

If you have your employer force these upon you as "benefits not essential for the task", then you will end up get taxed on them.

As an aside, make sure your company has in its articles some "interesting" secondary activities related to the main task, eg audio production...party event organisation, hospitality etc. You may have to actually take a token amount of money in for them...

dave

It's more the set up cost vs running costs vs benefits gained.
And the tax change just adds some complication and costs (albeit minor).

It's a no-brainer to go limited in the UK, but here I'm not sure.

It really depends on what your mid-long term view is. If you plan on building a business, taking any real risks, or contracting long term, then from my (non-accountant) viewpoint I reckon its worthwhile.

If you just want to contract for a year an go back, then the company setup costs will be significant, and there is a slowwwww liquidation period too.

dave

Here it's essential to have a gmbh.

If you don't, and things go belly up, your personally held responsible for all your debts for life, not just five years or so.!!!!!!!!
Or until you have totally repayed the debts, and the creditors never give up.!!!!!!!!!
With the gmbh things go flop,no problem the company is held responsible and not you, AND THEN IT'S END OF STORY.

Its not essential, and it depends on the business you are in. A one person graphic design business will be cash generating and is unlikely to fail with huge debts through capital investment. Someone buying a pizza restaurant may well do so.

A risk assessment should be part of your business plan. You do have one of those, don't you ?
...unless you borrowed money personally, in which case you will lose your collateral which you guaranteed as a director...
dave

That's the rub: I can't say how long I'll be doing this in Switzerland.

I'm also not a businessman, I'm just an IT wallah and a gmbh woudl only be for money reasons.

Not quite.
I'm an employee of my agency (I'm being pimped ;-). It's their risk.
If I was a one man self employed type, then yes there is more risk

But what about someone who has come over on a package which includes say a CHF2000/month housing allowance and subsidy of schooling fees, say CHF15,000 per child. does that then mean that CHF39,000 has to be added to the gross salary for tax declaration .

Nick.

Yes, that is exactly what it means, I already had this done to me since I am on EU money. It sucks big time as not only do you pay heaps of tax, your income also goes up which means you might get into a higher tax bracket.

Not nice . Edit: if this happens, you should still be able to claim a 1500chf/month expat allowance, as this situation is listed in Merkblatt 8, which I posted elsewhere on the forum. This is assuming you are on a limited B permit, in other words, if you can claim you are an expert who is here for limited time.

This has happened in the EU too for many such non-cash employee benefits even those that are for company business. In many cases the employer increases the expense payment, so the real value to the employee remains the same after tax.

dave

I've had an update, apparently this will apply to Federal taxes, and concern schooling and overseas allowances, ie any school fees and allowances payed by the employer will now have to be declared as income and will be taxed accordingly.

Has anyone heard about this or has he got the wrong end of the stick?

Nick