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Old 23.12.2019, 12:35
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Working remotely for USA company

Does anyone have experience/advice for what do do if living within Switzerland, but working for a company that is solely doing business outside Switzerland, in this case USA.

I am a US citizen, so I already know I will have to pay US taxes. I assume, I will likely also have to pay Swiss taxes. I am just not sure what the legal basis is--considering that I will be earning money in the US directly to US bank account. Main questions:

1. Do I just self-report this income here in Switzerland?

2. Do I need to incorporate somehow? (It seems I am not Sole-Proprietorship, since I only have one client.)

3. Will my employer in the US be responsible for added expenses/insurances etc. to be able to pay me whilst I live in Switzerland?

Any advice or where to go for these types of questions would be great. I just went to my cantonal Ausgleichskasse and they told me just to mail them a copy of my contract and an explanation of the situation and they will mail it back. But I in principle need to know what the situation is before I know what the contract will be (i.e. if I am working as a separate entity here, or an employee in the US, the contract will be different).
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Old 23.12.2019, 14:03
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Re: Working remotely for USA company

A resident of Switzerland providing services to a single foreign-based company has these options:

1. ANOBAG: The Swiss resident is considered an employee of the foreign company and is responsible for paying Swiss social charges and into a pension fund.

2. Payroll service/ staffing company: The Swiss resident could also contract with a Swiss-based payroll service. The Swiss resident's legal employer is then the payroll service and is responsible for paying Swiss social charges and into a pension fund. The foreign company pays the payroll service for services provided by the payroll service's employee. The payroll service will charge for its services.

3. Legal entity: The Swiss resident establishes (or buys) a legal entity which employs him/ her. The foreign company contracts with the legal entity.

In the case of a short-term Swiss resident, it is likely that the most viable options are 1. and 2. above.
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Old 23.12.2019, 16:42
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Re: Working remotely for USA company

Thanks Mullhollander, this is incredibly useful.

ANOBAG seems to be the keyword I wasn't googling yet, and this seems to me the best route.

Seems I just go to Ausgleichskasse and register as a working for a foreign entity with my estimated earnings? Will they explain where and how to pay my AHV and other obligations? I already bought my own accident/liability insurance through the health insurance company.

I guess the Third Pillar is optional, and probably doesn't make a huge difference for me, since I have to pay US taxes on the earnings even if they are in a swiss pension.
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Old 23.12.2019, 16:44
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Re: Working remotely for USA company

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Thanks Mullhollander, this is incredibly useful.

ANOBAG seems to be the keyword I wasn't googling yet, and this seems to me the best route.

Seems I just go to Ausgleichskasse and register as a working for a foreign entity with my estimated earnings? Will they explain where and how to pay my AHV and other obligations? I already bought my own accident/liability insurance through the health insurance company.

I guess the Third Pillar is optional, and probably doesn't make a huge difference for me, since I have to pay US taxes on the earnings even if they are in a swiss pension.
You may want to consider the tax implications of the different options Mullhollander describes. It could be VERY advantageous to establish your own legal entity and invoice out your services to your foreign employer.
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Old 23.12.2019, 16:50
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Re: Working remotely for USA company

Do you mean tax implications here in Switzerland? It seems I (or employer) will owe the same taxes no matter what.

In regards to US, I think they would be more comfortable with me as an employee, since they are worried about getting in trouble for having a contractor who is a ghost employee--I guess I could register as an S-corp there in the US and use this famous loophole, but in the end it seems I will end up paying the same taxes in the US no matter what.

But, I am open to any option: any advice on tax consultants with this kind of experience (preferably near Basel)?
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Old 23.12.2019, 16:57
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Re: Working remotely for USA company

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Do you mean tax implications here in Switzerland? It seems I (or employer) will owe the same taxes no matter what.

In regards to US, I think they would be more comfortable with me as an employee, since they are worried about getting in trouble for having a contractor who is a ghost employee--I guess I could register as an S-corp there in the US and use this famous loophole, but in the end it seems I will end up paying the same taxes in the US no matter what.

But, I am open to any option: any advice on tax consultants with this kind of experience (preferably near Basel)?
I am not an expert on this but the classic benefit of creating your own legal entity would be:
1) entity charges $$$ to customer
2) you pay yourself a relatively modest salary from the entity
3) you max. charge professional expenses (fitting of your study in your home office, etc.) to the entity
4) at some point you build up $$$ in the entity and find tax efficient ways to apply it (e.g. mega pension contributions, buying of property to rent out to you to live in, etc.))
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Old 23.12.2019, 17:02
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Re: Working remotely for USA company

Ah yes, this all sounds more or less familiar to what I have heard of people doing in the US with S-corps. I think it's true, you can save a bundle. It's something to look into, but this setup will likely only last a couple years. Also, it seems with ANOBAG I may even be entitled to unemployment in case I lose my job with my US company, so at least I'm paying for something
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Old 23.12.2019, 17:03
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Re: Working remotely for USA company

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I am not an expert on this but the classic benefit of creating your own legal entity would be:
1) entity charges $$$ to customer
2) you pay yourself a relatively modest salary from the entity
3) you max. charge professional expenses (fitting of your study in your home office, etc.) to the entity
4) at some point you build up $$$ in the entity and find tax efficient ways to apply it (e.g. mega pension contributions, buying of property to rent out to you to live in, etc.))



It's not quite that easy
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Old 23.12.2019, 17:11
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Re: Working remotely for USA company

As an ANOBAG employee, your employer will normally need to be affiliated with a Pillar II pension fund. The BVG Auffangeinrichtung, a quasi-governmental entity, could provide a pension fund for your employer. See this link (English):

https://web.aeis.ch/EN/pages/112/LOB...nefits%20plans

An option to ANOBAG, as previously mentioned, would be to use a payroll service such as Payroll Plus. More information is at this link (English):

https://payrollplus.ch/en/freelancer/solution/

With both options, you would have unemployment insurance since you would be employee.
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Old 23.12.2019, 17:33
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Re: Working remotely for USA company

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It's not quite that easy
Of course not. Just giving some inspiration.
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