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Old 30.06.2015, 10:46
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Work permit when working from home

I couldn't find this answered on the forum or official websites:

I am a UK citizen who has recently moved to Zug for a new job (unbefristet/unlimited contract). I am renting an apartment and have a 'B' residence permit. I would like my UK boyfriend to come and live with me. His UK employer says he can work from home, to enable him to live here (with short visits to the UK e.g. once a month). Many of his colleagues already do this, albeit living in other parts of the UK.

1) Residence permits: Would this be allowed from a Swiss perspective? e.g. could he get a residence (B?) permit despite having a UK job? Or would he be allowed to stay as a tourist, if he makes sure he leaves the country once every 3 months?

2) Swiss tax: Financially I could support us both (salary CHF 130k), but as we are not married, maybe they would only look to his salary (GBP 43k / CHF 63k). I can sort the UK aspects of his tax / double tax relief, but at what point would he need to register for tax and do a tax return in Switzerland? Is this determined by his residence status or are there separate rules for tax residence? (Assume that his employer would not operate Swiss payroll taxes, however correct this might be).

Many thanks in advance
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Old 30.06.2015, 10:55
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Re: Work permit when working from home

I work for a UK company and work from home in Switzerland in a very similar situation to your boyfriend.

1 - The B permit shouldn't be an issue as long as he earns over a certain threshold. I can't remember what this was but it's very low, I think it might have been 3000CHF equivalent per month.

2 - I only pay tax in the UK on my UK earnings and according to the Fribourg officials this is correct.
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Old 30.06.2015, 11:46
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Re: Work permit when working from home

The tourist idea wouldn't work as you have to leave for 3 months, not once every 3 months. The rule is 3 months in, then 3 months out.
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Old 30.06.2015, 11:59
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Re: Work permit when working from home

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The tourist idea wouldn't work as you have to leave for 3 months, not once every 3 months. The rule is 3 months in, then 3 months out.
Isn't it 90 days maximum allowed in any 6 month period?
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Old 30.06.2015, 13:03
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Re: Work permit when working from home

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2 - I only pay tax in the UK on my UK earnings and according to the Fribourg officials this is correct.
Seems a bit odd. I would have thought (and in my experience!) that it is your residency that defines where you pay tax. You only pay tax in the UK on income earned while you're in the UK.
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Old 30.06.2015, 13:06
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Re: Work permit when working from home

Yes, but over a rolling period.
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Old 30.06.2015, 13:29
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Re: Work permit when working from home

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The tourist idea wouldn't work as you have to leave for 3 months, not once every 3 months. The rule is 3 months in, then 3 months out.
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Isn't it 90 days maximum allowed in any 6 month period?
For Non-EU. UK and EU citizens have limitless entry to the Schengen zone, we can come and go as we please. Yes after 3 months in one place you should declare residency, but there is nothing to stop you having a holiday every other week all year in the Schengen Zone.
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Old 30.06.2015, 17:16
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Seems a bit odd. I would have thought (and in my experience!) that it is your residency that defines where you pay tax. You only pay tax in the UK on income earned while you're in the UK.
Yes, as a basic principle, it is your residence which drives your tax from employment.

In practice, this could be complex.

Note that the employer probably has a duty to operate UK PAYE, regardless of how taxable the person is in the end (e.g. their tax code could be nil, as non-resident, but still have to be processed through payroll). Or they could deduct full UK tax, only for the individual to be able to claim it all back once they've done a tax return (so with a cashflow impact for the employee). The employer may even have a duty to operate Swiss payroll taxes at source as well, but I don't know about that and it's up the employer to figure that one out!

The individual (e.g. my boyfriend or our Fribourger) would need would figure our their tax residence, regardless of what their employer has done. They would have to step through the respective tests of Swiss and UK residency. If it turned out that, under the laws of each country, they were resident in both countries, then the UK-Swiss tax treaty (Article 4) offers a bunch of tie-break tests so you end up with only one tax residency. The tests are about where your life, family, "centre of vital interests", etc are. Tax treaties are available online for free:
https://www.gov.uk/government/collec...d-and-in-force

The residency determines which country gets to tax what income - not just from employment, but worldwide income potentially as well, depending on the tax laws in the country of residence.

Layer on top of that, a country might still have a right to tax income sourced in their country, regardless of your tax residence e.g. if you rent out your UK house but are Swiss tax resident, the UK still gets to tax the income from the house, although in practice it is probably covered by your personal allowance. If anything were taxable in the UK by source, then Switzerland should give you double tax relief, so you are not doubly taxed.

UK tax residence is determined by the new(ish) Statutory Residence Test, which is a series of tests which aren't so complex when you step through them. You can view that here:
https://www.gov.uk/government/public...dence-test-srt

In this case, my boyfriend / our Fribourger could be automatically non-UK resident if they work "full-time" (physically) in Switzerland, but this in calculated in great detail, looking at actual number of hours worked in each location. If not, then you could manage to be Swiss resident by meeting other criteria e.g. under the threshold number of days in the UK, not having a house at your disposal there, limiting other ties to the UK.

I don't know the tests for becoming Swiss resident - perhaps the Fribourg tax official knows best (but it would be prudent to get the tax office confirmation in writing, or check the rules yourself). Nonetheless, I would be working hard to become and maintain Swiss tax residency, as it would be financially beneficial!


If you do become Swiss tax resident, consider making voluntary NIC contributions in the UK, to preserve your right to a state pension.

My poor boyfriend of course will be lectured in all of this.

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1 - The B permit shouldn't be an issue as long as he earns over a certain threshold. I can't remember what this was but it's very low, I think it might have been 3000CHF equivalent per month.
.


Great to hear you got a permit ok. I want him to be able to do everything properly i.e. comply with local healthcare and pension requirements (so all the more reason not to be paying UK tax!)


I think the limits for staying as a tourist are 3 out of 6 months:
http://www.expatica.com/ch/visas-and...nd_443220.html


Thanks for the help

Last edited by 3Wishes; 30.06.2015 at 17:37. Reason: merging consecutive replies
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Old 30.06.2015, 17:25
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Re: Work permit when working from home

Swiss resident test is easy - you have a permit to live here you're liable to pay tax here if you earn enough to do so.

I would assume that although your boyfriend pays his tax in the UK it's remitted back to Switzerland under some double taxation treaty.
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Old 30.06.2015, 17:48
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Re: Work permit when working from home

We were taxed here on the income earned here, and taxed in Canada on the income earned in Canada. The Swiss office's decision - it kept taxes simple and clear.
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Old 30.06.2015, 17:48
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Re: Work permit when working from home

I've asked everyone I've spoken to about it when getting my B permit, and none of them were interested in my UK job. I've quadruple checked this as it didn't sound right to me either.

I eventually got told it is definitely 100% right and to stop bothering them.

I still contribute to the UK tax and pension but not the national insurance. I have Swiss insurance here (all of the bloomin' multiple insurances).
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Old 30.06.2015, 17:59
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Re: Work permit when working from home

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Seems a bit odd. I would have thought (and in my experience!) that it is your residency that defines where you pay tax. You only pay tax in the UK on income earned while you're in the UK.
Hmm, my husband also works remotely (but for an NZ company) while based in Fribourg....but we have done the opposite to this for the past 3 years

He gets paid in NZ$ into an NZ bank account, but we were told (buy both Fribourg and NZ tax authorities) that you are taxed where you are resident. So in our case, Fribourg. He had to declare himself a "non-resident" of NZ and everything was straight-forward.

It's important to note though that he has to sign up to and pay AVS in Switzerland (all very straight-forward), and also has to get accident insurance as this is not covered by his NZ employer.
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Old 30.06.2015, 18:23
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Re: Work permit when working from home

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We were taxed here on the income earned here, and taxed in Canada on the income earned in Canada. The Swiss office's decision - it kept taxes simple and clear.

Countries which have a concept of tax "domicile" (as well as "residence") will have rules about not having to tax certain overseas income unless it is remitted to that country. This applies in the UK and so could well do in Canada. You are maybe still Canadian domiciled, so Swiss don't get to tax your non-Swiss income unless remitted. Could be something like that, although I'm no Canada / Swiss expert.
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Old 30.06.2015, 18:30
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Re: Work permit when working from home

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I've asked everyone I've spoken to about it when getting my B permit, and none of them were interested in my UK job. I've quadruple checked this as it didn't sound right to me either.

I eventually got told it is definitely 100% right and to stop bothering them.

I still contribute to the UK tax and pension but not the national insurance. I have Swiss insurance here (all of the bloomin' multiple insurances).

As long as you have it in writing from the Swiss authorities, I wouldn't worry. If they give a tax 'ruling' they should stick by it.


If you still paying half the Swiss 'extras' though, as well as UK tax, surely you would want to switch your residency to Switzerland (in line with your legal rights), and reduce your tax bill by 75%.
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Old 30.06.2015, 18:32
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Re: Work permit when working from home

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Swiss resident test is easy - you have a permit to live here you're liable to pay tax here if you earn enough to do so.

I would assume that although your boyfriend pays his tax in the UK it's remitted back to Switzerland under some double taxation treaty.

No, it won't be. The Governments never get together and sort out your tax for you, to save you the bother. It's each taxpayer's responsibility to get all the tax back that they are due (e.g. if their employer has taxed them when in fact they are non-resident). Never rely on the tax authorities giving you a refund that you are due!!


The wonderful world of self assessment tax.
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