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Old 19.11.2007, 15:21
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US vs Swiss Vaud taxes

I've tried to read the threads, but I still do not have very clear picture of the difference between US and Swiss net payments. I would greatly appreciate if someone can either direct me to a website, or just briefly and roughly describe what and where I will have to pay from 200K CHF annual. I will live in Lausanne, Vaud, have a family with one kid and a spouse (say, not working) and I am a US resident.

Perhaps I am asking too much, if you think so, please just do not consider my request. In any case, I am very grateful for any comments/advice.

Thanks,
Marvin
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Old 19.11.2007, 15:32
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Re: US vs Swiss Vaud taxes

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I've tried to read the threads, but I still do not have very clear picture of the difference between US and Swiss net payments. I would greatly appreciate if someone can either direct me to a website, or just briefly and roughly describe what and where I will have to pay from 200K CHF annual. I will live in Lausanne, Vaud, have a family with one kid and a spouse (say, not working) and I am a US resident.

Perhaps I am asking too much, if you think so, please just do not consider my request. In any case, I am very grateful for any comments/advice.

Thanks,
Marvin
As you will probably pay tax at source your HR department should be able to give you a pretty close figure.

It will, of course, depend on what you can claim against tax - about 5K for a child for example, and whther you have other benefits like a subsidised work restaurant or a company car.

I'd guess tax of around 20 to 25% in Switzerland.
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Old 19.11.2007, 17:22
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Re: US vs Swiss Vaud taxes

My experience with Canton Vaud Tax authorities was not very pleasent . I have to cough up 35% in 2001 with similar salary range. Although i have no dependents at that time.
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Old 19.11.2007, 20:24
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Re: US vs Swiss Vaud taxes

Are you a US citizen/greed card holder?

If so, the short answer is: total liability, paid to one country or the other, should work out to be roughly what you would pay to the US if you were still resident there.

As a US citizen/green card holder you are still liable for US taxes. If the Vaud tax works out lower than your US tax, you will pay something close to the difference to the US. If the Vaud tax works out more, you will have more foreign tax credits to deduct against your US liability.

I strongly recommend getting professional advise based on your individual situation - dual country tax planning gets complicated.

CS has a pretty decent tax calculator, if you know the town you will be moving into. (Remember, you pay local, cantonal and federal taxes, and the rates differ from one town to the next.)

https://calculators.credit-suisse.co...oal=110&lang=3

It may not be completely accurate for your situation, but close enough to give you an idea as to how much your Swiss liability might be.

Last edited by meloncollie; 19.11.2007 at 20:29. Reason: clarity
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Old 19.11.2007, 22:50
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Re: US vs Swiss Vaud taxes

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My experience with Canton Vaud Tax authorities was not very pleasent . I have to cough up 35% in 2001 with similar salary range. Although i have no dependents at that time.

Not pleasant? I'd LOVE to pay 35% tax. Unfortunately I pay far less :-(
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Old 19.11.2007, 22:57
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Re: US vs Swiss Vaud taxes

You might want to look at these threads:

Addressing Double Taxation (for Americans): American Competiveness Act

double taxation-- how to avoid? American working in CH

They both have links to the USA/Switzerland tax agreement.
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Old 20.11.2007, 14:02
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Re: US vs Swiss Vaud taxes

Thanks everyone for your help. When I go to Credit Suisse calculator, it gives me the tax rate around 29%. Not very high (compared with some other European countries) but not exactly low. Seems it can be even higher that we have currently in US => no double taxation ? ;-))

If anyone can just direct me to a link or website explaning the history and reasoning for relatively high taxes in French part compared even to Zurich? Because it is nicer ?

Again, thanks for the replies, now I've got some idea what we can expect in terms of direct taxes (still have to find out numbers for health insurance, car insurance, pension payments etc. etc.)
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Old 20.11.2007, 15:13
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Re: US vs Swiss Vaud taxes

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Seems it can be even higher that we have currently in US => no double taxation ? ;-))
It's really more like "sorta kinda maybe no double taxation, with the following exceptions:"

Whether you end up paying somewhat more, roughly the same, or somewhat less is very much dependant on your individual situation - both in Switzerland and the US.

Broadly speaking, and very much simplified, first you pay your Swiss taxes. Then you figure out what the IRS thinks you owe them - from your income, if you meet the overseas residence qualifications, you may deduct the USD 82,000-ish allowance. (Or portion thereof, blah blah blah...) Then you can take credit for most, but not necessarily all, of the taxes you paid to CH. Typically, if your Swiss payments are lower than your US tax liability, you will still owe Uncle Sam some dosh. If your Swiss payments were higher than your US tax liability, you can carry the credits forward (I think for 5 years?) against future US taxes.

There are umpteen billion pages of IRS rules, regulations and formulas to wade through to figure all this out. Do consider getting professional advise.

(Are you here on assignment from a US company? If so, many offer tax advise, and some offer tax equalization programs as part of a relocation package...)

Bear in mind that the two systems think about income and deductions differently, making tax/investment planning a bit trickier. Oh, and taking the allowance and foreign tax credits pushes many expats into the AMT who might not otherwise be affected if resident in the US...

As to why the difference in taxes across cantons and towns in Switzerland:

http://www.estv.admin.ch/e/dokumenta...orzuege/e3.pdf

Essentially, each canton and community decides how much revenue it needs to keep things running another year; the tax rate is roughly based on what it will take to generate that sum, given the population and wealth of the community/canton. The cool thing about Switzerland is that citizens get to vote to approve or reject the proposed rate.

Last edited by meloncollie; 20.11.2007 at 15:16. Reason: spelling
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