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Old 14.04.2012, 19:13
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Split tax Liability??? Is that possibe?

Hi forum,

My wife and I are soon to be moving to Zurich. She will be employed by the Federal Government and will have a normal tax structure (social security with held at job, locale taxes filed at end of year, etc).

I on the other hand have a greater issue. I am a US citizen that will have the ability to reside in CH on a Family regroupment B permit. I will essentially be telecommuting from Zurich and conducting no business in Switzerland at all. The US considers me present in the US if I am in the US more at least 35 days for any given 12 month period. I know that I will be in the US for at least 60 days a year (for work).

So, who do I pay taxes to? I should not be subject to social security taxes as there is no mechanism to claim these from my income since im being paid in the US (direct deposit). What about local taxes? Am I obligated to pay these? Is my income (sourced from the US) supposed to be claimed with my wifes income?

Im lost. ive tried other posts and even read this: http://www.uscms.org/uscms_at_work/w...xes%202009.pdf

and I cannot make a determination. Does anyone have an idea?

Thank you in advance for any guidance you can offer.
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Old 14.04.2012, 20:14
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Re: Split tax Liability??? Is that possibe?

Have you read Publication 54 from the IRS? (http://www.irs.gov/publications/p54/index.html) This is their tax guide for filers living outside the United States.

My guess is that if you're simply telecommuting and being paid by a US-based company/clients into a US bank account, that you'll be subject to normal US income tax (and possibly state tax depending on the state from which you're departing), but I am not a tax expert, just another expat
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Old 14.04.2012, 20:45
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You need to look at the double taxation agreement for US / CH. there will be information on determining tax residence (probably Switzerland, but maybe dual resident in first year) and taxation of employment income (usually clause 15 if the OECD model was used)

Note that being paid outside Switzerland is not on its own sufficient to exempt an individual from social security. Depending on the situation, the employer could be liable for Swiss social security and tax withholding...and consequently an admin nightmare. (note, my comment here is general...often telecommuting will not trigger local soc.sec and tax withholding...but I have not had to investigate US/CH for the expats I handle)
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Old 23.04.2012, 03:45
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Re: Split tax Liability??? Is that possibe?

You say you are a US citizen, therefore, you are always a tax resident of the US irregardless of days spent in the US. You are fully subject to US Tax.

The fact that you're telecommuting from Switzerland means that you are conducting business in Switzerland. You are taxable in Switzerland.

This is a typical expat scenario. If you remain on US payroll, you need to fill out a Form 673 and request your Payroll manager from US Federal withholding. Also, have them turn off state withholding if you've broken state residency. If you don't do this, you will have cash flow issues.

Side note: you risk the issue of having to pay Swiss social security if you don't apply for a certificate of coverage to exclude contribution on the Swiss side.

You will pay taxes in Switzerland. On your US return, you will declare your world-wide income, exclude a portion of it under foreign earned income exclusion. The residual tax amount not excluded can be reduced through your foreign tax credit (granted that they relate to your foreign work days).

FYI, you should let your company know that you're telecommuting from Switzerland. Depending on your role and responsibility, you may have created permanent establishment for your company in Switzerland.


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Hi forum,

My wife and I are soon to be moving to Zurich. She will be employed by the Federal Government and will have a normal tax structure (social security with held at job, locale taxes filed at end of year, etc).

I on the other hand have a greater issue. I am a US citizen that will have the ability to reside in CH on a Family regroupment B permit. I will essentially be telecommuting from Zurich and conducting no business in Switzerland at all. The US considers me present in the US if I am in the US more at least 35 days for any given 12 month period. I know that I will be in the US for at least 60 days a year (for work).

So, who do I pay taxes to? I should not be subject to social security taxes as there is no mechanism to claim these from my income since im being paid in the US (direct deposit). What about local taxes? Am I obligated to pay these? Is my income (sourced from the US) supposed to be claimed with my wifes income?

Im lost. ive tried other posts and even read this: http://www.uscms.org/uscms_at_work/w...xes%202009.pdf

and I cannot make a determination. Does anyone have an idea?

Thank you in advance for any guidance you can offer.
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