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Old 04.04.2015, 22:28
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What happens when a dual citizen moves back to Switzerland?

My partner has dual citizenship: Swiss and American. He moved to the US when his parents split up when he was 15. He attended college here and currently works for a large technology company based in California. It is pretty common for people in his position at the company to make temporary moves to the Zurich office for a year or two. We would really like to take advantage of that, but I'm worried about several things having to do with his Swiss citizenship. Namely:
  • Taxes: I understand that Swiss dual citizens do not have to pay Swiss taxes when living abroad if they live in the country where they have second citizenship. How does that change if we move to Switzerland? I'm pretty sure that we would still have to pay US taxes because those are based on citizenship, not residency. Will we just have to pay double taxes? Can we get out of that by maintaining a residence in the US?
  • Military service: Because he left when he was 15, my partner never had to complete his required military conscription. He's now 31. Will he have to serve if we move for a year or two?
  • Lifestyle: Would the expat community in Zurich be welcoming to someone who isn't really an expat?
  • Me: My partner and I are not married, but we have discussed it and it would likely become a reality before this move. I don't know if it's a practical idea though. I'm a software developer and I could probably get myself transferred to a position in Zurich on my own. If he does end up having to pay double taxes, wouldn't it be better for us to have me file single and only pay US taxes? If that doesn't work out though, I would like to have a work visa. I assume that would be easier to do if you are married to a citizen. What are my chances of getting one as a software engineer (either married or not)?

We are still in the information gathering stage and will of course be seeking out consulate resources as well as advice from his company. (I'm sure that this is not the most complicated immigration situation they've dealt with by a long shot). However, if anyone else has a similar experience or advice I'd love to hear from you.
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Old 04.04.2015, 22:38
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Re: What happens when a dual citizen moves back to Switzerland?

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TaxesWill we just have to pay double taxes? Can we get out of that by maintaining a residence in the US?
Yes, he'll have to do a US tax return, no getting out of that. Also will have problems getting a bank account here.

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Military service: Because he left when he was 15, my partner never had to complete his required military conscription. He's now 31. Will he have to serve if we move for a year or two?
No, unlikely at that age.

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Lifestyle: Would the expat community in Zurich be welcoming to someone who isn't really an expat?
I would think so.

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Me: My partner and I are not married, but we have discussed it and it would likely become a reality before this move. I don't know if it's a practical idea though. I'm a software developer and I could probably get myself transferred to a position in Zurich on my own. If he does end up having to pay double taxes, wouldn't it be better for us to have me file single and only pay US taxes? If that doesn't work out though, I would like to have a work visa. I assume that would be easier to do if you are married to a citizen. What are my chances of getting one as a software engineer (either married or not)?
He will struggle to bring you if you are not married. Getting a work permit here by yourself as a non-eu is hard. This will make no difference, if you are working here you will also have to pay both Swiss and US tax.
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Old 04.04.2015, 22:40
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Re: What happens when a dual citizen moves back to Switzerland?

^^^above all true except for the bit about paying double taxes. Yes you'll both have to file US tax forms and you may or may not have to pay any additional (not double) taxes to the US.
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Old 04.04.2015, 22:47
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Re: What happens when a dual citizen moves back to Switzerland?

Thanks! I know US taxes are a reality for both of us. I'm more concerned about the Swiss taxes though. Will they be higher for him as a citizen vs as a worker on a two year visa?
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Old 04.04.2015, 22:49
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Re: What happens when a dual citizen moves back to Switzerland?

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Thanks! I know US taxes are a reality for both of us. I'm more concerned about the Swiss taxes though. Will they be higher for him as a citizen vs as a worker on a two year visa?
Swiss taxes are the same for everyone, just based on your earnings not your nationality.
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Old 04.04.2015, 22:50
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Re: What happens when a dual citizen moves back to Switzerland?

some say the best Google office is the once in Zurich
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Old 04.04.2015, 22:55
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Re: What happens when a dual citizen moves back to Switzerland?

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Swiss taxes are the same for everyone, just based on your earnings not your nationality.
Not exactly. A Swiss citizen will not be taxed at source and has to file a tax return here regardless of earnings.
A foreign B permit holder earning below the tax return threshold of 120 000 chf ( 500000 chf in Geneva) will be taxed at source at the cantonal average rate.
Whether that is higher or lower than 'normal' taxation depends on where you live and what tax deductibles you have.

Overall though there is not much difference and there isn't a different rate for Swiss compared to foreigners.
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Old 05.04.2015, 00:16
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Re: What happens when a dual citizen moves back to Switzerland?

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if you are working here you will also have to pay both Swiss and US tax.
Only if you earn a very high salary.

Current exemption is 100k, plus housing, so around 150k gross.

Tom
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Old 05.04.2015, 00:53
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Re: What happens when a dual citizen moves back to Switzerland?

Your husband won't have to serve, nor will he have to pay the tax for those that don't join. Last I checked all that stuff ended at 30.
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Old 05.04.2015, 01:53
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Re: What happens when a dual citizen moves back to Switzerland?

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Swiss taxes are the same for everyone, just based on your earnings not your nationality.
That's not correct. Based on the canton and salary, a Swiss may well pay more than a non-Swiss/B-permit holder. And the difference can be relatively significant.
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Old 05.04.2015, 10:22
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Re: What happens when a dual citizen moves back to Switzerland?

The tax situation will vary widely depending on where you live, your financial situation, your familial situation, your pension, etc. Very broadly speaking - and I do emphasize that this is a gross generalization - many US citizens resident in Switzerland will pay in total, combining US and CH taxes together, about the same amount as they would have paid if still US resident.

Some people end up not having to pay any extra to Uncle Sam. Some people end up having to pay significantly more - YMMV. There are indeed some individual variations that you should be aware of and plan for as you consider a move back to Switzerland.

Some things to be aware of:

Your Swiss pension is fully taxable in the US. While the tax owed the US on your Swiss pension contributions might not seem like much in year 1, years down the road you might find that this is a significant amount. For some US citizens, participating in Swiss pension schemes is not an effective tax strategy.

Swiss taxes vary across cantons/Gemeinden - and therefore the amount you deduct from your US liability for taxes paid to CH will as well. If that deduction is large, you might find that the AMT comes into play on your US taxes, raising your overall tax burden.

The two systems handle specific items differently - you might find that a strategy that is tax advantageous in one country is a disadvantage in the other.



My advice for any blue passport holder thinking of moving: Consult a professional qualified and experienced in both tax systems in advance of your move! If your company still offers the perk of overseas tax planning, take advantage of it - you will need advice tailored to your specific situation. And even if the company does not offer this, pay for a consultation yourself - it will be money wisely invested.



ETA:

If this is a temporary corporate assignment ask about a tax equalization program.

Last edited by meloncollie; 05.04.2015 at 12:16.
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Old 05.04.2015, 10:35
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Re: What happens when a dual citizen moves back to Switzerland?

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...
A foreign B permit holder earning below the tax return threshold of 120 000 chf ( 500000 chf in Geneva) will be taxed at source at the cantonal average rate...
To be totally clear, someone earning more than the threshold will still be taxed at source, but will also have to fill in a tax return, and any shortfall made good. (Or a refund paid, but that's unlikely).

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...I'm a software developer and I could probably get myself transferred to a position in Zurich on my own. ... What are my chances of getting one as a software engineer (either married or not)?
Your chances are low, unless you have an EU or Swiss passport. To work here, the employer must demonstrate that there is no EU or Swiss person capable of doing the job.
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Old 05.04.2015, 18:00
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Re: What happens when a dual citizen moves back to Switzerland?

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That's not correct. Based on the canton and salary, a Swiss may well pay more than a non-Swiss/B-permit holder. And the difference can be relatively significant.
I really don't believe there is much in it, standard deductions are 10-15k so taxation is very similar. I only worked part time & my deductions exceeded over 20k in all of the previous 7 years. Understanding the rules helps, I paid less on a C permit in ZH
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