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Old 29.06.2021, 14:54
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Employment & Tax

Dear English Forum folks,

I have been following this forum for a while and I have found it to be immensely useful. Today, I signed up and wanted to pick your brains on an employment matter.

I have been in CH for over 6 years on a non-EU on a C Permit. My employer and I, have agreed to part ways. There is a redundancy package that I am expecting to be paid out as a lump sum.

I currently live in Neuchatel and am subject to one of the highest tax burdens in CH. I was wondering to move to Zug or Schwyz at year-end for few months to establish residency in the Canton to benefit from the low rates of personal tax. Financially it makes sense.

However, not sure of the other aspects. Has anybody done this or has any advice to offer?

Thank you!
Sam
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Old 29.06.2021, 15:35
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Re: Employment & Tax

Depends if you can move canton. Most times your permit as a non-EU is tied to the employer. So its possible that you're not able to move canton. Check this first. It should be marked somewhere on the permit.
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Old 29.06.2021, 15:44
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Re: Employment & Tax

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Depends if you can move canton. Most times your permit as a non-EU is tied to the employer. So its possible that you're not able to move canton. Check this first. It should be marked somewhere on the permit.
C permits are not tied so not a problem. The OP would need a new C permit from the new canton, but again that shouldn't be too much of a problem; still it would be better to have a new job lined up in said canton.
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Old 29.06.2021, 16:21
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Re: Employment & Tax

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I currently live in Neuchatel and am subject to one of the highest tax burdens in CH. I was wondering to move to Zug or Schwyz at year-end for few months to establish residency in the Canton to benefit from the low rates of personal tax. Financially it makes sense.
It does not work that way. Income is proportioned and there are rules relating to income is calculated in the final years in one Kanton and the first year in a new Kanton. Seek professional advice.
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Old 30.06.2021, 07:12
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Re: Employment & Tax

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It does not work that way. Income is proportioned and there are rules relating to income is calculated in the final years in one Kanton and the first year in a new Kanton. Seek professional advice.
Actually, it does - the Switzerland-wide rule is that your tax for the full year is where your residence was on Dec 31. So, if you lived in Kanton A from January until November and moved to Kanton B in December, you only owe tax for the whole year to Kanton B (and the federal tax, of course) based on their tax rates.
You don't submit any tax return to Kanton A and if any tax was pre-paid, they will refund.

BTW - for moves within Kanton, the rules are still inconsistent. Most Kantons follow the same as above; NW and OW follow the rule that tax is paid in the gemeinde where you lived on Jan 1 for the full year; FR and NW apply tax to gemeinde pro-rata.
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Old 30.06.2021, 12:21
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Re: Employment & Tax

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Actually, it does - the Switzerland-wide rule is that your tax for the full year is where your residence was on Dec 31. So, if you lived in Kanton A from January until November and moved to Kanton B in December, you only owe tax for the whole year to Kanton B (and the federal tax, of course) based on their tax rates.
You don't submit any tax return to Kanton A and if any tax was pre-paid, they will refund.

BTW - for moves within Kanton, the rules are still inconsistent. Most Kantons follow the same as above; NW and OW follow the rule that tax is paid in the gemeinde where you lived on Jan 1 for the full year; FR and NW apply tax to gemeinde pro-rata.
Thanks . This is my understanding too that the income during the calendar is taxable based on the residency status at the year-end in a given Canton.
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Old 30.06.2021, 12:45
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Re: Employment & Tax

Your bigger problem is likely to be getting a rental for “a few months”. Generally minimum terms are a year and depending on the size of your payout temporary accommodation will likely wipe out the tax savings. Would you also keep a place in NE? If so, you’d need to factor in the cost of two rents.
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Old 30.06.2021, 13:22
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Re: Employment & Tax

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Your bigger problem is likely to be getting a rental for “a few months”. Generally minimum terms are a year and depending on the size of your payout temporary accommodation will likely wipe out the tax savings. Would you also keep a place in NE? If so, you’d need to factor in the cost of two rents.
Can always try Service apartment ? Or are they 1 year min only too ?
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Old 30.06.2021, 22:28
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Re: Employment & Tax

Sometimes, if you're moving in a suspicious way (in december to a tax saving Kanton), they ask for additional evidence that you're actually moving, e.g., proof that you vacated the previous apartment by calling movers, permanent contract in the new place, etc. You can't just have an Airbnb for 2 weeks.
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Old 30.06.2021, 23:47
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Re: Employment & Tax

Another way to save the on the taxes will be to buy back the 2nd Piller (LPP), so you don't have to change the Canton in this case.
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