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Old 01.03.2013, 22:00
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Withholding Tax on leave encashment not deposited by employer to canton tax authority

Dear All,

Tried to search forum with this unique situation but could not find any thread, Please feel free to redirect me if there is one already.

I resigned from my last job in 2012 december and during my tax filing process came to know that my employer has only deposited tax to canton tax authorities for regular salary but no tax and social security (AHV/KTG/NBU) has been deposited to respective authorities which was deducted from my leave payment including employer&employee contribution.

I am currently struggling with following question and searched various website but could not find proper details
- Is KTG/NBU Applicable on Leave encashment ?
- Is it normal that employer deposit withholding tax sometime during first quarter of next year. Although strange but in that case how does one file tax return and assess the final tax liability.
- So far my employer kept telling that all has been cleared but when I showed them the tax statement form kanton which showed clearly that they have not paid the amount, they started giving some fishy responses such as for employer as they have to pay bonus the can delay till end of march and few more.

May be this is true but in this case my problem is how to I file my tax return as my income is far more than what has been declared by my employer which may attract further social security deductions as well since they are also not deposited yet.

Could someone please help me with this, so that I can plan accordingly

Thanks for your help

Regards
IG
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Old 01.03.2013, 22:16
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Re: Withholding Tax on leave encashment not deposited by employer to canton tax autho

AHV payments are often a year late, same with pension. Your talking about a few weeks ago,,,,,,,,,,It will sort itself out in the end.

Your employer is liable to make the deductions. You should get an end of year statement from him & base your tax declaration on that.
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Old 01.03.2013, 22:23
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Re: Withholding Tax on leave encashment not deposited by employer to canton tax autho

Your employer should give you a document that states all your income and contributions... and that is the basis for your tax return.

Hopefully they will declare the correct amounts - but the problem will not be yours - as long as the tax office doesn't think you've deliberately tried to hide payments or whatever... do you have monthly salary statements and details of payments from the employer to your bank account ?
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Old 05.04.2020, 10:06
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Re: Withholding Tax on leave encashment not deposited by employer to canton tax autho

Hi,

I left my employer mid of last year. I was on withholding tax. My last payments were higher than normal due to adjustment of holidays and other items. Therefore, the withholding tax was also higher. I am expecting a tax refund due to this higher deduction.
I had checked with Zurich tax office, however, they have not raised an invoice for the withholding tax. They told me that I would have to wait as they are going through some system upgrade.
As the situation of the company is not stable, I am anxious. What happens if the company is unable to pay this tax deducted at source at a later time when the invoice is raised? Who is responsible for the loss due to delay by tax authorities in raising the invoice?
1. Do I need to make good this withholding tax amount which would be lost?
2. I am expecting a tax refund. What happens to it if this withholding tax amount is lost?
What is the legal/established position?
Thank you in advance.
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Old 05.04.2020, 11:27
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Re: Withholding Tax on leave encashment not deposited by employer to canton tax autho

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Hi,

I left my employer mid of last year. I was on withholding tax. My last payments were higher than normal due to adjustment of holidays and other items. Therefore, the withholding tax was also higher. I am expecting a tax refund due to this higher deduction.
I had checked with Zurich tax office, however, they have not raised an invoice for the withholding tax. They told me that I would have to wait as they are going through some system upgrade.
As the situation of the company is not stable, I am anxious. What happens if the company is unable to pay this tax deducted at source at a later time when the invoice is raised? Who is responsible for the loss due to delay by tax authorities in raising the invoice?
1. Do I need to make good this withholding tax amount which would be lost?
2. I am expecting a tax refund. What happens to it if this withholding tax amount is lost?
What is the legal/established position?
Thank you in advance.

The employer is liable for payment of the Quellensteuer (source tax) to the cantonal tax office. See IV. para. 3 and 4 at this link (German):

https://www.steueramt.zh.ch/internet...zstb-88-1.html
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Old 05.04.2020, 11:31
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Re: Withholding Tax on leave encashment not deposited by employer to canton tax autho

No problem. The tax office will pursue your employer. As long as you have all the correct records 'as if' it was done properly - you can file your tax return and get your refund.



Some employers can get away with paying a long way 'in arrears' - it has nothing to do with you...



Some businesses are on January to December financial years with lodgement up to end of March - that's absolutely normal, and they can delay the lodgement of their annual reports if they have a reason to - businesses can also apply to work on a different financial year, if that suits their business flow. For example, a private school may have their end of year at the end of July, to match the school contract year for all staff and parents, making it easier to see how their business is functioning annually based on the school-year cycle.
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Old 05.04.2020, 13:28
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Re: Withholding Tax on leave encashment not deposited by employer to canton tax autho

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I left my employer mid of last year. I was on withholding tax. My last payments were higher than normal due to adjustment of holidays and other items. Therefore, the withholding tax was also higher. I am expecting a tax refund due to this higher deduction.
Don't expect a refund, withholding is calculated on a monthly basis, not yearly.

Tom
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Old 05.04.2020, 14:16
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Re: Withholding Tax on leave encashment not deposited by employer to canton tax autho

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Don't expect a refund, withholding is calculated on a monthly basis, not yearly.

Tom
My annual assessment is lower than the total withholding tax deducted for the year. However, if this amount is lost, there would be an issue if the liability falls on me.
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Old 05.04.2020, 14:18
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Re: Withholding Tax on leave encashment not deposited by employer to canton tax autho

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No problem. The tax office will pursue your employer. As long as you have all the correct records 'as if' it was done properly - you can file your tax return and get your refund.



Some employers can get away with paying a long way 'in arrears' - it has nothing to do with you...



Some businesses are on January to December financial years with lodgement up to end of March - that's absolutely normal, and they can delay the lodgement of their annual reports if they have a reason to - businesses can also apply to work on a different financial year, if that suits their business flow. For example, a private school may have their end of year at the end of July, to match the school contract year for all staff and parents, making it easier to see how their business is functioning annually based on the school-year cycle.
The question is what happens if the business goes bankrupt in the meanwhile? Who is liable?
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