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-   -   Why am I not getting charged witholding tax? (https://www.englishforum.ch/finance-banking-taxation/129155-why-am-i-not-getting-charged-witholding-tax.html)

Nehp 21.10.2011 17:50

Why am I not getting charged witholding tax?
 
Hello all, newbie here so go easy. I have trawled the various links on tax but have not found a response to my specific questions.

I have been contracting in Basel since the middle of this year and as of yet I have not paid any witholding tax. My contract is with a UK based agency who charge the client here in Basel. The agency pay my daily rate directly into my account and basically say tax is my problem as I am a contractor and not an employee.

I have read (here and on other tax related sites) that any company contracting staff out to Swiss companies needs to be registered in Switzerland and needs to withold tax from the ex-pat contractors. My permit which I have not received yet, but for which I have seen proof of the decision by Basel authorities to grant me a permit, lists the agency as my 'employer', which for me makes them liable for the witholding tax?

From what I have read also, I must file a tax return if I am on a foreign payroll and resident here and I do not pay tax witholding.

Do I need to set a company for myself here, should I go back to the agency and tell them to sort it out, or what other alternative do I have?

One piece of information I forgot to mention is that I am resident here, i.e. I have moved everything here and intend to stay here for the next 2/3 years (pending contract extension).

Thanks for any help you can give me, if I have left out important details then please let me know.

:)

Phil_MCR 21.10.2011 18:00

Sounds like they are treating you as self employed. Not paying tax sounds cool to me :)

gourmet 21.10.2011 18:11

Re: Why am I not getting charged witholding tax?
 
i hate to say this but how did you apply for your work permit? I am not talking about resident permit. When I was thinking of contracting in Geneva, my agent put an "umbrella" company in touch with me. They are going to handle all the paperwork (i.e. resident/work permit) and any tax etc. I will be their "employee" so as to get all paperwork done for a small fee. did they not suggested that to you? If not, you best look for one quickly! I might be able to find the one I got quotes from... PM if you need it.

clickuk 21.10.2011 18:43

Re: Why am I not getting charged witholding tax?
 
So are you getting paid in directly into your UK company or personal account?

If so you would be liable to pay UK Tax on your self assessment or corporation tax depending on how you received the income.

Sbrinz 21.10.2011 18:56

Re: Why am I not getting charged witholding tax?
 
I don't think you are resident here. Do you have any documents from Swiss agencies? A permit B or L? If you are a resident here then you should not be working without the permit.

It looks to me as though you are working here for a UK company as self employed contractor, and you will be paying UK tax on your money. Keep all your receipts for your hotel here, and your travelling expenses!

Nehp 25.10.2011 16:23

Re: Why am I not getting charged witholding tax?
 
Quote:

Originally Posted by gourmet (Post 1384129)
i hate to say this but how did you apply for your work permit? I am not talking about resident permit. When I was thinking of contracting in Geneva, my agent put an "umbrella" company in touch with me. They are going to handle all the paperwork (i.e. resident/work permit) and any tax etc. I will be their "employee" so as to get all paperwork done for a small fee. did they not suggested that to you? If not, you best look for one quickly! I might be able to find the one I got quotes from... PM if you need it.


I did not apply for a permit. The agency in the UK applied for it and it somehow got messed up back when I started (staff departures in the agency). Anyway they have e-mailed me proof that Basel authorities have made a positive decision on my residency permit (type was not given). The hard copy should arrive in 2 to 3 weeks I was told.

NotAllThere 25.10.2011 16:37

Re: Why am I not getting charged witholding tax?
 
As I understand it a UK based agency can only apply for a work permit on your behalf, if they've a base in Switzerland. Are you an EU citizen?

snice 28.10.2011 21:54

Re: Why am I not getting charged witholding tax?
 
Quote:

Originally Posted by Sbrinz (Post 1384176)
I don't think you are resident here. Do you have any documents from Swiss agencies? A permit B or L? If you are a resident here then you should not be working without the permit.

It looks to me as though you are working here for a UK company as self employed contractor, and you will be paying UK tax on your money. Keep all your receipts for your hotel here, and your travelling expenses!

Definitely not tax resident in UK, have been working in various countries for more than 6 years and actually did not do any work this year (travelling) before coming to Basel. I have realised that actually the agency have received my work permit but residency is something else.

Sbrinz 28.10.2011 23:02

Re: Why am I not getting charged witholding tax?
 
Unless you have the beige piece of paper with your photo and signature, you are working illegally. You would be deported fairly quickly, and banned from coming back for at least a year.

So maybe you can go to Basel Fremdenpolizei and ask them for the permit fairly soon. In the meantime fingers crossed nobody finds you working.


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