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Old 03.10.2011, 10:07
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Non-resident taxation - tax return & income basis .

My first post!

I am looking at the possibility to work for very short periods in Switzerland. I am a bit confused by information I read about various aspects of non-resident taxation. I assume the following:

- I will be in Switzerland working for less than 30 days (thus not resident under the Swiss tax code).
- I will be working for a company that has a local establishment (i.e. no OECD standard double tax treaty article 15 point 2 double tax treaty exemption).
- I will be making LESS than CHF 120.000

I have these questions and a few more further down as commentary to the sources I've read:
- Will I have to file a tax return?
- How can I find the tax rates for the payroll tax (wikipedia) or wage tax at source (taxation.ch), if that is what is applicable to me?
- I understand that the tax rate is in theory based on the world-wide income also for non-residents, but that cannot work if one does not file a tax return. Is the payroll tax exempt from the rule that the world-wide income is used as the basis for calculating the tax rate?
- If I understand correctly, if I were to make more than CHF 120.000, I would be required to file a tax return. Would then suddenly the tax rate be calculated on my world-wide income?

I have tried to read up on this, but there is definitively confusing information floating around.

From taxation.ch on individual taxation:
http://www.taxation.ch/index.php?id=20

"""Non-resident taxpayers may be subject to Swiss taxes only with respect to income from certain Swiss sources. Important examples are:

[...]
income from business performed in Switzerland and permanent establishments located in Switzerland (assessed tax)

[...]
"""

What does the "(assessed tax)" mean? Further:

"""
Expatriates

Alien employees working in Switzerland for a limited period of time are taxed as follows:

1. Very often, there is no tax in Switzerland if the employer is a non-resident enterprise without permanent establishment in Switzerland and if the stay in Switzerland does not exceed 183 days per calendar year, depending on the applicable tax treaty.

2. If there is no treaty or if the conditions above are not met (e.g. if the employer is a Swiss company) the employee is subject to federal, cantonal and municipal taxes.

2a. Alien employees of Swiss companies or Swiss permanent establishments without a so-called "C-permit" are subject to wage tax at source. This tax is calculated on the gross income (standard deductions are included in the tariff). They may only apply for the assessment procedure if the annual gross income exceeds CHF 120,000.

2b. Alien employees with a "C-permit" or with a gross income exceeding CHF 120'000, and also employees of non-resident enterprises (without permanent establishment in CH) are subject to assessed income taxes. They must file a personal tax return and pay their taxes by themselves (no taxation at source). This tax is calculated on the net income and certain additional deductions apply.
""""

From the above - I am assuming that the "assessment procedure" is the right to file a tax return?
"gross income" in 2a can only be Swiss income, right? There is no other information available for the people doing payroll.

Now turning to another source - Wikipedia:
http://en.wikipedia.org/wiki/Taxatio...and#Income_tax

"""
The income tax is imposed as a payroll tax on foreign workers without a residence permit,[13]

[13] Amonn, 65.
"""

This Dr Toni Amonn seems to be the main reference for the whole wikipedia article as well as the one behind taxation.ch. Is he the one that defines the Swiss tax code? ;-)

Another reference:
http://www.lowtax.net/lowtax/html/jswpetx.html#income

"""
The basis of assessment is as follows:

Residents are taxable on their worldwide income other than the income arising from enterprises and real estate located abroad;
Non-residents are taxable on income arising on permanent establishments and real estate located in Switzerland, but the rate of tax is based on the individual's world-wide income.
"""

Now without filing a tax return, there is no way the income tax for a non-resident can possibly be based on the individual's world-wide income, right?
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Old 03.10.2011, 18:23
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Re: Non-resident taxation - tax return & income basis .

You will simply have tax deducted at source (PAYE) from your monthly pay packet.

The amount deducted is dependent on the amount earned, and is a sliding scale, set by the tax dept and administered by your HR dept.

The deductions are your final tax liability. You do not need to file a annual tax return.

If you make MORE than 120k pa, you CAN file a tax return, if you wish.
If resident here, and earning >120k pa CHF, filing a return is normally to your benefit, as the final tax rate will be a bit lower than the PAYE rate.
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Old 03.10.2011, 18:25
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Re: Non-resident taxation - tax return & income basis .

This refers to the PAYE:
2a. Alien employees of Swiss companies or Swiss permanent establishments without a so-called "C-permit" are subject to wage tax at source. This tax is calculated on the gross income (standard deductions are included in the tariff). They may only apply for the assessment procedure if the annual gross income exceeds CHF 120,000.

So you pay PAYE based on your monthly CH pay slip. And that is it. Finished.

The tax payment is deducted by the employer. You do not have to do anything.
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Old 04.10.2011, 07:42
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Re: Non-resident taxation - tax return & income basis .

Thanks for the information.

Now I have found the Quellensteuern and the actual rates

http://www.estv.admin.ch/bundessteue...248/index.html

It does not say how to change this given an E101/A1 form though. If one is resident in an EU country one should not pay social contribution to another country.
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Old 11.11.2011, 11:02
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Re: Non-resident taxation - tax return & income basis .

In a similar situation as Chast - non-resident, coming in on a B licence, working for local company, subject to PAYE. Did anyone figure out how things work with social and pensions contributions? I don't have a place in Switzerland (staying in hotels) so technically I don't have a Swiss address. I figured I am only liable for taxes and nothing more. Am I right?
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