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Old 23.02.2007, 12:15
Richard Richard is offline
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Re: tax / social security / pension obligations


just trying to get a clear outline of what my financial obligations are (will be) once i start working in switzerland, and on whether or not it's possible to offset/reclaim any of these later. have read posts in this forum, as well as the excellent, but missing some jigsaw pieces and not sure of current position re: bilateral agreements. would be very grateful if someone could run a quick sanity check on the following and let me know what's wrong, missing etc

This is what i *think* I have to pay, but i'm not clear on the how/when/if of claiming/reclaiming/offsetting:

PENSION: 1st pillar [mandatory]
AHV - Old Age and Survivorsí Insurance
IV - Disability Insurance
EO - Compulsory Income Regulations (?)
ALV - Unemployment Insurance
KV - Private Health Insurance, possible to offset against gym subs

PENSION: 2nd pillar [mandatory]
UVG - Accident Insurance
BVG - Occupational Pension

INCOME TAX: at source, can be offset against (eg) UK tax obligations
CHURCH TAX: at source, can be reclaimed

incidentally, I'm EU, L permit, and will be employed in Zurich as an individual (via an umbrella), and i expect to be paying full tax and NI in the UK for the duration of my time in switzerland...

Well you have been reading but it is not quite the whole picture, so lets look at this.

AHV/IV/EO comes as a single package of 5.05% up to 106,800 - thereafter it is peanuts.

Unemployment insurance is some 1-2% of income and
Health insurance is extremely variable - visit to get an idea of what you are likely to pay. note this varies according to where you live. Furthermore, the private part is probably not what you think. There is an obligation to have minimum insurance which covers many things and although you pay for this it is not private. Private demands a premium to the obligatory health insurance.
Accident insurance belongs to your deductions above and not to your pension scheme. When you are employed your employer is obliged to pay the working accidents part of this and almost without exception the whole of this is paid.

The company pension scheme is defined by the company but must at least exceed the minimum. This is to be found in many sources and it increases according to age. Your contribution also is variable but you can reckon with between 5 and 8% assuming you are over 25. Under 25 it is not really a pension but an insurance...

Income tax is usually at source for newcomers to Switzerland. You should be very careful with respect to hopeful offsets. These usually result in a higher final tax amount here or sub optimal tax planning.
Church tax is optional. You can if you are spiritually inclined register a religion or you can claim to have none in which case this does not apply. I am not sure what you are referring to with can be reclaimed - once paid the money has been transferred to the church finito - you can reclaim it first in heaven.

To reclaiming. You can reclaim tax paid by completing a tax form at the end of the year, electing to be tax not at source, buy property or get a c permit. Once you take this step it is an annual requirement from which you are never freed.

The offsetting is within the Swiss system and you should be very careful about including foreign elements as these usually result in a higher tax burden unless you are very careful - life insurance policies etc are fine, but mortgages usually return to bite with income and capital tax.

You missed out 3rd pillar which you do not have to pay but you would be daft not to as it is very tax efficient.

Be specific if you want more information ie ask pointed questions.
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