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  #21  
Old 12.01.2007, 10:02
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Re: How to freelance in CH?

Hi Richard

Thanks as always for your knowledgeable advice

Sole trader is what I want to set up, I have a company name, not got my surname in it though, so will re think that.

So....

How do I go about setting it up? do I go to the Kreis Buro (Town Hall)? to get the AHV form?

My main worry is that I have read somewhere else that tax for a sole trader over here can be a lot as you pay tax as a company and then tax as an employee of your own company? I am probably completely off the matk here and have read something completely wrong but I wont be earning a great deal at first and am concerned that i'll end up paying more tax than its worth working.

Also is the system similar to the UK? Do you file your accounts at the end of the year and then receive a tax bill the following year? also i assume the tax returns will be in german (I can not speak enough german yet) so is it adviseable to get an accountant to file your tax returns

Sorry for the questions....

Cheers
Nicky

Quote:
HI Nicky,

There are three structures you can take (Not strictly true there are some others but they will not be applying (ie cooperative and partnership) for reasons beyond the scope)

1, Sole trader
2. GmbH equivalent UK Ltd.
3. AG equivalent UK PLC

To setup either of the latter two you will need to follow set rules AND have a deposit of multiple thousands of Swiss Francs (or business usable assets to the equivalent value). The minimum figures are 10K for a GmbH and 50K for an AG.

For a sole trader you will need to find a name for your business that includes your surname and complete the AHV sole trader application form. You may also find it useful to invest the SFr. 150 - 200 to register your business on the trade register.

And then of course you will need to open a business bank account...

And that is it. Now I guess you have some questions as it cannot be that easy, right? So fire away...
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  #22  
Old 12.01.2007, 10:11
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Re: How to freelance in CH?

Nicky,

Checkout post #12 here: branching out professionally

You have the potential for paying less tax, as you can claim more.

I am not a sole trader but, self-employed (selbständig, which may be the same thing as sole trader) - and have been for over 10 years...
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  #23  
Old 12.01.2007, 10:14
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Re: How to freelance in CH?

Hi, this is for Richard or anyone who can help.
as a sole trader do you have to have a regular income. ie do you set up the company and pay yourself a monthly salary. as my hubby is thinking about this option. However is income will probably be intermittent. He may also have to do some of the work in the UK initially until he gets things off the ground in swiotzerland. Would that be a problem working in uk say3 3 months a year. Have spoken to local tax office and seems OK, but wondered if anyone here had done this?
Was told he can stay / work in UK avearage 90 days /annum .but would be considered as Swiss resident and therefore pay tax, social security etc to swiotzerland.
any advice?
Joan
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  #24  
Old 12.01.2007, 10:41
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Re: How to freelance in CH?

Hi Joan,

For small and irregular amounts the simplest thing is to invoice in your own name (Like John Smith - Chicken Sexer) and have to money paid into you usual private bank account.

At the end of the year total all the invoices for income, total all receipts for expenses. Subtract expenses from the Invoices total and that is the net income for tax purposes. **Keep copies of everything**

If you wish to be 'non-resident' from the UK you must remain out of the UK for the statutory period (90 days?) per year. The advantages of this are really for millionaires. For income earned in the UK and kept in the UK, then it may be advantagous to declare this on a UK tax return - to use the tax-free allowances.
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  #25  
Old 12.01.2007, 10:51
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Re: How to freelance in CH?

Quote:
Nicky,

Checkout post #12 here: branching out professionally

You have the potential for paying less tax, as you can claim more.

I am not a sole trader but, self-employed (selbständig, which may be the same thing as sole trader) - and have been for over 10 years...
Thanks AbFab, I've had a read, making a bit more sense, I assume then that all the forms will be in German?

I know I am probably asking some really dumb questions here but can anyone point me in the right direction to get the local tax office details, I can then give them a call and get some advice
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  #26  
Old 12.01.2007, 10:56
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Re: How to freelance in CH?

Quote:
Thanks AbFab, I've had a read, making a bit more sense, I assume then that all the forms will be in German?

I know I am probably asking some really dumb questions here but can anyone point me in the right direction to get the local tax office details, I can then give them a call and get some advice
The local tax office is in your Gemeinde - so go down there and ask for the forms. I trust you have an AHV card as you will need that at some point.
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  #27  
Old 12.01.2007, 10:57
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Re: How to freelance in CH?

Quote:
For income earned in the UK and kept in the UK, then it may be advantagous to declare this on a UK tax return - to use the tax-free allowances.
Hi bFab
Can you explain the above?

What are the tax free allowances?

I may have potentially 4 clients in the UK, my accountant in the UK has told me I can carry on submitting tax returns in the UK as an expat but I thought switzerland had a lower tax rate therefore would make sense to declare over here?

If I were to continue to submit UK tax returns would it be OK to have the CH companies pay into my UK account also and declare those earnings there?

The money I will earn in the UK will be more than the money i earn in CH so if I were to file seperate tax returns in the UK and CH I fear the amount I would earn in CH would be too little to bother, but I then have the added problem of the CH companies being liable for my social contributions

Cheers

Nicky
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  #28  
Old 12.01.2007, 11:01
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Re: How to freelance in CH?

Quote:
Hi, this is for Richard or anyone who can help.
as a sole trader do you have to have a regular income. ie do you set up the company and pay yourself a monthly salary. as my hubby is thinking about this option. However is income will probably be intermittent. He may also have to do some of the work in the UK initially until he gets things off the ground in swiotzerland. Would that be a problem working in uk say3 3 months a year. Have spoken to local tax office and seems OK, but wondered if anyone here had done this?
Was told he can stay / work in UK avearage 90 days /annum .but would be considered as Swiss resident and therefore pay tax, social security etc to swiotzerland.
any advice?
Joan
You do not need to have any income but you need to keep basic accounts as Adfab says keep copies of everything including dinners etc
You really also need to get an estimate on his overall income for the year. If this is likely to be over 75K which I guess it will be if he is doing 90 days in the UK then you will be liable for VAT and the best partsl of what Adfab says then falls out of the window in that:
You must keep correct accounts:
You must have a sepearate Business Bank account
You must be registered - note not GmbH or AG or SA but simply registered.

Note to the tax questions and will I get stung twice no way! You need to be aware that you are allowed to make a loss and it is also expected in the first year or two. This loss can then be directly deducted from your personal tax liability - note that similar applies for a GmbH only it is being saved for a rainy day
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  #29  
Old 12.01.2007, 11:04
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Re: How to freelance in CH?

Quote:
The local tax office is in your Gemeinde - so go down there and ask for the forms. I trust you have an AHV card as you will need that at some point.
Hmmm whats a AHV card? and how do i get one????
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  #30  
Old 12.01.2007, 11:10
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Re: How to freelance in CH?

Quote:
Hmmm whats a AHV card? and how do i get one????
How long have you been here? Or more to the point have you ever worked here? It is a little grey card on which is printed your number. This number is the central reference in Switzerland to you as a person. You should have received one when you first started working or more to the point you must have received one.
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  #31  
Old 12.01.2007, 11:14
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Re: How to freelance in CH?

Quote:
Hi bFab
Can you explain the above?

What are the tax free allowances?
The allowance that everyone has for being single/ married etc. Where you don't pay any tax on the first £5000 ish earned

Quote:
I may have potentially 4 clients in the UK, my accountant in the UK has told me I can carry on submitting tax returns in the UK as an expiate but I thought Switzerland had a lower tax rate therefore would make sense to declare over here?
While the Swiss taxes maybe lower overall, they are not zero, which is the effective rate for the first £5000 ish as above.

Quote:
If I were to continue to submit UK tax returns would it be OK to have the CH companies pay into my UK account also and declare those earnings there?
I doubt it - it's not legal and why should Swiss companies make an overseas transfer for your tax benefit? And why would you want to pay higher UK tax rates? You have a tax-free allowance to use in CH too.

Quote:
The money I will earn in the UK will be more than the money i earn in CH so if I were to file separate tax returns in the UK and CH I fear the amount I would earn in CH would be too little to bother, but I then have the added problem of the CH companies being liable for my social contributions
Can you not add your Swiss earnings to your spouse's? If you are self employed you are responsible for your social payments. Swiss companies now are unlikely to use a self-employed person unless they can prove they are registered as self employed and are paying their own social contributions (no big deal a small % of net income).
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  #32  
Old 12.01.2007, 11:14
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Re: How to freelance in CH?

Quote:
Hi bFab
Can you explain the above?

What are the tax free allowances?

I may have potentially 4 clients in the UK, my accountant in the UK has told me I can carry on submitting tax returns in the UK as an expat but I thought switzerland had a lower tax rate therefore would make sense to declare over here?

If I were to continue to submit UK tax returns would it be OK to have the CH companies pay into my UK account also and declare those earnings there?

The money I will earn in the UK will be more than the money i earn in CH so if I were to file seperate tax returns in the UK and CH I fear the amount I would earn in CH would be too little to bother, but I then have the added problem of the CH companies being liable for my social contributions

Cheers

Nicky
How nice of your accountant to explain that to you. Although you can decide not to tell the whole truth I think when it comes to earnings you need to make sure you are:
1. well covered ie leave no trace
2. Have a clever legal structure that makes your uk income not your income.
3. Like living on your nerves, drinking plenty and taking risks
because for the purpose of taxation as a Swiss resident your global income is taxable.
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  #33  
Old 12.01.2007, 11:18
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Re: How to freelance in CH?

Quote:
I doubt it - it's not legal and why should Swiss companies make an overseas transfer for your tax benefit? And why would you want to pay higher UK tax rates? You have a tax-free allowance to use in CH too.
Actually it is entirely legal and common to have companies pay into a foreign business bank account. The world would not work internationally if it was not allowed...
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  #34  
Old 12.01.2007, 20:00
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Re: How to freelance in CH?

Quote:
Can you not add your Swiss earnings to your spouse's? If you are self employed you are responsible for your social payments. Swiss companies now are unlikely to use a self-employed person unless they can prove they are registered as self employed and are paying their own social contributions (no big deal a small % of net income).
This is what I was intending on doing originally but then I was asked about the social contributions and that threw me.

So.... I can pay my own social contributions and declare my earnings on my husbansd tax return? think that sounds the easiest option for now.

And carry on with my UK earnings in the UK and file a tax return in the UK?

God this is all so confusing....

Thanks again for the advice
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  #35  
Old 12.01.2007, 21:41
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Re: How to freelance in CH?

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For a sole trader you will need to find a name for your business that includes your surname
I have set up all my print material with my first name and not second name. wha I mean is that my soon to be launched business includes my 1st name. All my cards, brochure are printed. Now I am about to register for selbständig/Einzelfirma status. PLEASE tell me that I did not screw up everything by not using my second name????????????
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  #36  
Old 12.01.2007, 21:51
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Re: How to freelance in CH?

I am really SWEATING! Can someone answer the question in my previous post? Can I get away with my first name as part of the company name? No one on phone told me that I needed to use my second name for selbständig/Einzelfirma status
This is all so COMPLICATED
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  #37  
Old 12.01.2007, 23:52
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Re: How to freelance in CH?

Quote:
This is what I was intending on doing originally but then I was asked about the social contributions and that threw me.

So.... I can pay my own social contributions and declare my earnings on my husbansd tax return? think that sounds the easiest option for now.

And carry on with my UK earnings in the UK and file a tax return in the UK?

God this is all so confusing....

Thanks again for the advice
Taking a strict legal view, it all depends on two concepts Residence and Domicle. There is basically three situations:

- The simple one is when you move here with all your family and give up your house etc. in the UK, in this case you are taxed here on world wide income.

- The next would be where you move here, but keep your house and perhaps some family members remain behind to attend school etc.. In such a case you are considered to have moved only on a temp. basis and you are taxed on your Swiss income here and all other income in the UK.

- Third case is where it is not clear! you have fees or salary coming out of the UK, you travel there every week to consult with your client and so on. In such a case the two revenue authorities must decide what is to be done...

You seem to fall into the third case, now this is the strict legal situation. You may do as you are suggesting and have no problems or you may come up against some young gun in the revenue that wants to make a name from himself and he decides to go after your world wide income and raise an assessment accordingly! If this happens then it could involve you in having to appealing the assessment and if I remember correctly you normally have to pay it and then appeal it!

Simple thing to do is just call the SWISS tax office and ask them, if they say go for it, then at least you have a basis for doing it and if the UK revenue come calling you can just point them in the direction of the Swiss guys and let them fight it out <g>.
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  #38  
Old 13.01.2007, 01:06
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Re: How to freelance in CH?

Quote:
Simple thing to do is just call the SWISS tax office and ask them, if they say go for it, then at least you have a basis for doing it and if the UK revenue come calling you can just point them in the direction of the Swiss guys and let them fight it out <g>.
Cheers for the advice Jim

Think I'll chat with the local tax office, will make things easier, its not as if I am earning a fortune in both countries, not worth getting into trouble for. If its all straight forward enough here then i think id rather declare everything in CH.

Thanks everyone for the advice

Nicky
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  #39  
Old 13.01.2007, 01:35
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Re: How to freelance in CH?

Quote:
I have set up all my print material with my first name and not second name. wha I mean is that my soon to be launched business includes my 1st name. All my cards, brochure are printed. Now I am about to register for selbständig/Einzelfirma status. PLEASE tell me that I did not screw up everything by not using my second name????????????
Sorry you did screw up it must include your surname - They will tell you this when you try to register it...
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Old 13.01.2007, 01:40
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Re: How to freelance in CH?

Quote:
Taking a strict legal view, it all depends on two concepts Residence and Domicle. There is basically three situations:

- The simple one is when you move here with all your family and give up your house etc. in the UK, in this case you are taxed here on world wide income.

- The next would be where you move here, but keep your house and perhaps some family members remain behind to attend school etc.. In such a case you are considered to have moved only on a temp. basis and you are taxed on your Swiss income here and all other income in the UK.

- Third case is where it is not clear! you have fees or salary coming out of the UK, you travel there every week to consult with your client and so on. In such a case the two revenue authorities must decide what is to be done...

You seem to fall into the third case, now this is the strict legal situation. You may do as you are suggesting and have no problems or you may come up against some young gun in the revenue that wants to make a name from himself and he decides to go after your world wide income and raise an assessment accordingly! If this happens then it could involve you in having to appealing the assessment and if I remember correctly you normally have to pay it and then appeal it!

Simple thing to do is just call the SWISS tax office and ask them, if they say go for it, then at least you have a basis for doing it and if the UK revenue come calling you can just point them in the direction of the Swiss guys and let them fight it out <g>.
Its much easier than that. If your primary residence and that is defined as the central point from which your life is lived, is in CH you are liable for global income to be taxed under the Swiss system. If you are also liable under another jurisdiction you can apply for relief but that is it and if the two countries have no tax accord then you pay in both... Merry Christmas
Thankfully the UK and Switzerland have an accord but I do not see your claim or desire to pay UK personal tax.
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