Go Back   English Forum Switzerland > Help & tips > Finance/banking/taxation  
Reply
 
Thread Tools Display Modes
  #21  
Old 13.03.2008, 21:03
Goldtop's Avatar
Forum Legend
 
Join Date: Feb 2008
Location: Zurich
Posts: 2,844
Groaned at 11 Times in 11 Posts
Thanked 905 Times in 625 Posts
Goldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond repute
Re: Tax For Foreign Earnings ?

Quote:
View Post
Under Swiss tax law, you are taxed on your worldwide income.

I once worked out that the Swiss tax was around 24%, by the time you included the indirect taxes like health insurance, rubbish bag fees, etc

Direct taxes hover around the 12% range (one months salary), which you generally pay once a year in one lump sum.

Even at around 24%, Swiss taxes are very reasonable.
Do not forget the compulsory Social Security contributions to AHV (old age insurance), ALV (unemployment insurance), IV (invalidity insurance) and FAK (family allowances).

These add up to 15% and is split between employer and employee. Self-employed pay both parts.
Reply With Quote
  #22  
Old 13.03.2008, 21:09
Tilia's Avatar
Forum Legend
 
Join Date: Nov 2007
Location: ZH
Posts: 2,746
Groaned at 75 Times in 42 Posts
Thanked 2,649 Times in 1,194 Posts
Tilia has a reputation beyond reputeTilia has a reputation beyond reputeTilia has a reputation beyond reputeTilia has a reputation beyond reputeTilia has a reputation beyond reputeTilia has a reputation beyond repute
Re: Tax For Foreign Earnings ?

As Richard already mentioned, there are ways around it. If you want to come, I think it would be well spent money to get some sound advice from a _recommended_ Swiss tax-advisor on the best way for you to set up/do your business.


[quote=Blewyn;188575]
Quote:
View Post
Under Swiss tax law, you are taxed on your worldwide income.

I once worked out that the Swiss tax was around 24%, by the time you included the indirect taxes like health insurance, rubbish bag fees, etc
[\quote]
Bloody hell ! A quarter of my income !!! Might have to re-think this one...What if my wife buys the house and I come and go as a tourist ? (I would be away working at least 50% of the time).
Reply With Quote
  #23  
Old 14.03.2008, 09:14
FriendlyKiwi's Avatar
Forum Veteran
 
Join Date: Jan 2008
Location: Shoppinzentrum
Posts: 1,782
Groaned at 19 Times in 15 Posts
Thanked 914 Times in 551 Posts
FriendlyKiwi has a reputation beyond reputeFriendlyKiwi has a reputation beyond reputeFriendlyKiwi has a reputation beyond reputeFriendlyKiwi has a reputation beyond repute
Re: Tax For Foreign Earnings ?

Quote:
View Post
Bloody hell ! A quarter of my income !!! Might have to re-think this one...What if my wife buys the house and I come and go as a tourist ? (I would be away working at least 50% of the time).
24% is low. In New Zealand the top tax bracket was 40%, with average tax around 33%.

In Germany taxes are also higher. During reunification, up to 50% or more.

Remember too: Switzerland has wealth tax. In Zurich a 1m CHF house will cost around 2,500 in wealth tax each year.

Taxes would be lower if everybody paid their share - if you try to avoid paying tax, we have to subsidise you with our taxes.

Does that sound fair?
Reply With Quote
  #24  
Old 15.03.2008, 01:29
Gr8-Ideas's Avatar
Junior Member
 
Join Date: Mar 2008
Location: Crans-près-Céligny
Posts: 46
Groaned at 0 Times in 0 Posts
Thanked 1 Time in 1 Post
Gr8-Ideas has no particular reputation at present
Re: Tax For Foreign Earnings ?

Quote:
get some sound advice from a _recommended_ Swiss tax-advisor
Is there a list or some type of register for Friendly Tax Advisor's for the ex-pat / new European?

Especially in the region of Swiss's most western Socialist republic?? (Great Analogy Shorrick)
Reply With Quote
  #25  
Old 17.03.2008, 18:55
Newbie
 
Join Date: Mar 2008
Location: Muscat, Oman
Posts: 9
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
Blewyn has no particular reputation at present
Re: Tax For Foreign Earnings ?

Quote:
View Post
24% is low. In New Zealand the top tax bracket was 40%, with average tax around 33%.
24% is not low compared to the 0% I pay right now.
Quote:
View Post
Taxes would be lower if everybody paid their share - if you try to avoid paying tax, we have to subsidise you with our taxes.

Does that sound fair?
Yes it does. The reason is because I won't be in Switzerland for more than 48% of the time, and all my income is generated and earned outside Switzerland. I am therefore pumping wealth directly into the Swiss economy, taking none out, while using the communal property and services less than half of the time.

In effect my net contribution to the Swiss economy will be greater than that of someone actually working there - after all your tax comes from an income you have taken out of Switzerland. I shall be bringing fresh funds from outside the country.
Reply With Quote
  #26  
Old 27.03.2008, 21:23
Goldtop's Avatar
Forum Legend
 
Join Date: Feb 2008
Location: Zurich
Posts: 2,844
Groaned at 11 Times in 11 Posts
Thanked 905 Times in 625 Posts
Goldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond repute
Re: Tax For Foreign Earnings ?

Quote:
View Post

I am therefore pumping wealth directly into the Swiss economy, taking none out, while using the communal property and services less than half of the time.
But your wife will live continuously in Switzerland. Your anticipated children will go to school here. And all will benefit from superb Swiss social security, when afflicted by illness, invalidity, unemployment, etc.
Reply With Quote
This user would like to thank Goldtop for this useful post:
  #27  
Old 28.03.2008, 15:55
Newbie
 
Join Date: Mar 2008
Location: Muscat, Oman
Posts: 9
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
Blewyn has no particular reputation at present
Re: Tax For Foreign Earnings ?

I think this is covered by some of the local taxes (which i would be paying) no ?

FYI in most of the EU you can live without paying income tax on foreign earnings as long as you spend no more than 180 days a year in country (even if you are a national). In the UK the limit is 90 days.
Reply With Quote
  #28  
Old 28.03.2008, 16:58
Forum Legend
 
Join Date: Jan 2007
Location: Geneva
Posts: 5,514
Groaned at 123 Times in 108 Posts
Thanked 3,297 Times in 1,737 Posts
Shorrick Mk2 has a reputation beyond reputeShorrick Mk2 has a reputation beyond reputeShorrick Mk2 has a reputation beyond reputeShorrick Mk2 has a reputation beyond reputeShorrick Mk2 has a reputation beyond reputeShorrick Mk2 has a reputation beyond repute
Re: Tax For Foreign Earnings ?

Quote:
View Post
I think this is covered by some of the local taxes (which i would be paying) no ?
If you're non-resident then you only pay taxes on
  • Rent from Swiss real estate;
  • Profits of a Swiss partnership or sole trading fi rm;
  • Income from a trade or business attributable to a permanent establishment in Switzerland;
  • Income from a professional practice in Switzerland;
  • Fees for services as a director or offi cer of a Swiss corporation; (income tax on directors’ fees is normally deducted at source);
  • Payments from a Swiss pension fund
Quote:
FYI in most of the EU you can live without paying income tax on foreign earnings as long as you spend no more than 180 days a year in country (even if you are a national). In the UK the limit is 90 days.
An individual is resident for tax purposes mainly if the centre of his vital interests is in Switzerland (and in the canton/municipality respectively). Key factors are where a person has a permanent home, where his family lives and where his most important personal and economic contacts are. This concept is similar to Art. 4 of the OECD Model Convention.

Tax residence, however, may also arise if an individual works in Switzerland for a period of minimum 30 days or if he stays in Switzerland (without working) for a period of minimum 90 days. He may be taxed as a resident for this period of time (pro rata temporis).
__________________
The opinions expressed above are not necessarily the opinions of management and in fact may be the opposite of that intended in order to confuse and obfuscate trolling readers.
Reply With Quote
This user would like to thank Shorrick Mk2 for this useful post:
  #29  
Old 28.03.2008, 19:29
Member
 
Join Date: Mar 2008
Location: in CH
Posts: 136
Groaned at 0 Times in 0 Posts
Thanked 3 Times in 2 Posts
GBer has slipped a little
Re: Tax For Foreign Earnings ?

Quote:
View Post
I think this is covered by some of the local taxes (which i would be paying) no ?

FYI in most of the EU you can live without paying income tax on foreign earnings as long as you spend no more than 180 days a year in country (even if you are a national). In the UK the limit is 90 days.

How does this work in Switzerland? Is it 180 days? Or???
Reply With Quote
  #30  
Old 06.06.2008, 11:00
Member
 
Join Date: Jan 2007
Location: Zurich
Posts: 143
Groaned at 16 Times in 6 Posts
Thanked 38 Times in 19 Posts
private_banker has annoyed a few people around hereprivate_banker has annoyed a few people around hereprivate_banker has annoyed a few people around here
Re: Tax For Foreign Earnings ?

Quote:
View Post
Bloody hell ! A quarter of my income !!! Might have to re-think this one...What if my wife buys the house and I come and go as a tourist ? (I would be away working at least 50% of the time).
Have you ever thought about the flat rate tax agreement in Switzerland...I don't know what your overall wealth is and whether you have enough to convince the tax authorities to offer you one.

Let me know if you need further info on the flat rate tax.
Reply With Quote
  #31  
Old 17.04.2009, 15:15
Newbie
 
Join Date: Mar 2008
Location: Muscat, Oman
Posts: 9
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
Blewyn has no particular reputation at present
Re: Tax For Foreign Earnings ?

Quote:
View Post
But your wife will live continuously in Switzerland. Your anticipated children will go to school here. And all will benefit from superb Swiss social security, when afflicted by illness, invalidity, unemployment, etc.
True. This will be exactly the same situation as if I were living anywhere else in Europe. Some of my co-workers live in the UK, where they pay no taxes, because they work here in the Middle East, and spend less than 90 days a year in the UK. It's either that, or forego the contribution to the economy that their foreign earnings represent.

My wife and anticipated children would of course be paying taxes on any income they generate in Switzerland..
Reply With Quote
  #32  
Old 17.04.2009, 15:25
krlock3's Avatar
Forum Legend
 
Join Date: Feb 2006
Location: Zürich
Posts: 3,098
Groaned at 48 Times in 35 Posts
Thanked 2,407 Times in 1,144 Posts
krlock3 has a reputation beyond reputekrlock3 has a reputation beyond reputekrlock3 has a reputation beyond reputekrlock3 has a reputation beyond reputekrlock3 has a reputation beyond reputekrlock3 has a reputation beyond repute
Re: Tax For Foreign Earnings ?

If they spend less than 90 days in the UK then they dont really live there do they?
Reply With Quote
  #33  
Old 17.04.2009, 20:52
Goldtop's Avatar
Forum Legend
 
Join Date: Feb 2008
Location: Zurich
Posts: 2,844
Groaned at 11 Times in 11 Posts
Thanked 905 Times in 625 Posts
Goldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond reputeGoldtop has a reputation beyond repute
Re: Tax For Foreign Earnings ?

Quote:
View Post
True. This will be exactly the same situation as if I were living anywhere else in Europe. Some of my co-workers live in the UK, where they pay no taxes, because they work here in the Middle East, and spend less than 90 days a year in the UK. It's either that, or forego the contribution to the economy that their foreign earnings represent.

My wife and anticipated children would of course be paying taxes on any income they generate in Switzerland..
Switzerland taxes husband and wife together on their entire global assets and incomes. Maybe other countries permit split tax filings. Not in Switzerland.
Reply With Quote
  #34  
Old 19.04.2009, 14:26
Newbie
 
Join Date: Apr 2009
Location: Thailand
Posts: 9
Groaned at 0 Times in 0 Posts
Thanked 3 Times in 1 Post
joemcfly has no particular reputation at present
Re: Tax For Foreign Earnings ?

I think the problem here, OP, is that on forums like this, you're always going to get two sets of advice -- one from high-earners, and one from "the rest of us".

Most people will bark that you need to pay taxes worldwide, because they themselves pay taxes worldwide. Be aware that not everyone's situation is the same... some people earn much more than others, and that opens them up to better deals overall.

It's just the way of the world. Money talks.

Depending on your income bracket, you may be able to negotiate a flat tax. The question then, though, is whether you can conduct your work from within Switzerland and then still benefit from the tax... I would think the answer is a near-definite NO, but I'm going to ask a question in another thread that pertains to my situation that may well help you out.

I'll edit this thread with a link to that one, when I've done so.

Cheers, J
Reply With Quote
  #35  
Old 19.04.2009, 14:33
Newbie
 
Join Date: Apr 2009
Location: Thailand
Posts: 9
Groaned at 0 Times in 0 Posts
Thanked 3 Times in 1 Post
joemcfly has no particular reputation at present
Re: Tax For Foreign Earnings ?

Here's the link to the other thread I mentioned

http://www.englishforum.ch/finance-b...tml#post440533
Reply With Quote
  #36  
Old 04.05.2009, 10:04
Newbie
 
Join Date: Mar 2008
Location: Muscat, Oman
Posts: 9
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
Blewyn has no particular reputation at present
Re: Tax For Foreign Earnings ?

I think there's a problem with that link ?

You are right about the people who are taxed worldwide vs those who are not. One thing the former may not realise is that when you work in a zero-tax country, your salary is reduced to reflect the lack of tax. I would say that the financial advantage of working in the ME in my line compared to the same job in the UK is about 10% only. If I were to pay swiss tax on my salary, I would be at a considerable disadvantage. However, when we have kids it may be a different story - private school fees and the inability to buy property here in the ME mean that rent & fees amounts to something similar to swiss tax...ish....so the idea isn't completely dead yet...

Maybe I could divorce my wife, she could move to Switzerland then I would stay with her on my time off ! ;-)
Reply With Quote
  #37  
Old 05.05.2009, 12:25
Syt Syt is offline
Member
 
Join Date: May 2009
Location: Lausanne
Posts: 124
Groaned at 0 Times in 0 Posts
Thanked 41 Times in 31 Posts
Syt has made some interesting contributions
Re: Tax For Foreign Earnings ?

If I understand correctly your work exclusively in the ME (Dubaï only?) and you are fully paid by a UK company for that activity, right?

Then if you come to Switzerland and become a tax resident in Switzerland the following is possible:
a. you apply for a lump-sum regime: will mean that you can't work at all in Switzerland (the same applies to your wife). the lump-sum (= your estimated income) will be fixed based on your rental (estimated) cost, but is generally not lower than CHF 200'000 (depends on the canton of domicile). This regime is subject to discussions (abolishment) in some cantons (ZH for example)

b. you are ordinary taxed in Switzerland, meaning that you are taxed on your worlwide income, provided that no double tax treaty is applicable (i.e. income allocated to the other country). Unfortunately CH currently does not have a double tax treaty for income tax with the UAE, but depending where you work in the ME and if your employer could pay you out of a treaty-country, then your salary might only be taxable abroad (and if no taxation abroad, then no Swiss tax...).

c. if there is no possibililty to allocate the taxation of your salary to a foreign country, then you come to Switzerland to a canton that has a low tax rate. The tax rate is progressive in Switerland (with the exception of one canton). There are cantons (most of it in the German part) that have a much lower tax rate than Geneva. But lower than 16% will be hard.

d. other countries may be interesting for you....

See my profile and contact me if you want to discuss this further.
Rgds
Reply With Quote
  #38  
Old 05.05.2009, 13:53
Newbie
 
Join Date: Apr 2009
Location: Thailand
Posts: 9
Groaned at 0 Times in 0 Posts
Thanked 3 Times in 1 Post
joemcfly has no particular reputation at present
Re: Tax For Foreign Earnings ?

Syt, could you please point me in the direction of literature explaining some of the "discussions" that Cantons have been having re: the abolishment of the lump-sum taxation option? Thanks!
Reply With Quote
  #39  
Old 05.05.2009, 15:38
Syt Syt is offline
Member
 
Join Date: May 2009
Location: Lausanne
Posts: 124
Groaned at 0 Times in 0 Posts
Thanked 41 Times in 31 Posts
Syt has made some interesting contributions
Re: Tax For Foreign Earnings ?

Quote:
View Post
Syt, could you please point me in the direction of literature explaining some of the "discussions" that Cantons have been having re: the abolishment of the lump-sum taxation option? Thanks!
Can you read German? Here is a link from the tax authority of the canton of Zurich which is currently the only one to have abolished this regime (will enter into force on 1.1.2010): http://www.sk.zh.ch/internet/sk/de/mm/2009/047-2.html

Some other comments here:
http://www.swisster.ch/en/news/busin...tax_116-323415

In fact the pressure came from France after having Johnny Halliday, a famous French singer coming to the "lump-sum regime" in Switzerland while his friends were telling everywhere in the French newspaper that he was not at all living in Switzerland... Double pressure came when the Vaud finance minister decided to "defend" this taxation method by appearing in a French TV reportage on this taxation method. He tried to show that it was not a negotiation but in front of the camera he did exactly the contrary. This regime is old and is most used in the French speaking cantons and is specifically recognized in some double tax treaties (France for instance...). Some political trends are of the opinion that this regime is against the equality of treatment between Swiss tax payers. There has been some discussions to abolish that regime at federal level with effect on all the cantons, but as far as I am informed, those discussions are closed. In the meantime, other cantons, such as ZH, through "Volksinitiative" (proposition of a minimal number of people of the canton to vote on a specific change in legislation), have achieved to abolish this regime. There may be other German speaking cantons which may abolish this regime in the coming months. It is highly probable that this regime will disappear during the next 10-15 years (at least no more possible to apply for and transitional measures for the existing regimes).
Reply With Quote
This user would like to thank Syt for this useful post:
  #40  
Old 09.05.2009, 10:23
Newbie
 
Join Date: Mar 2008
Location: Muscat, Oman
Posts: 9
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
Blewyn has no particular reputation at present
Re: Tax For Foreign Earnings ?

Quote:
View Post
b. depending where you work in the ME and if your employer could pay you out of a treaty-country, then your salary might only be taxable abroad (and if no taxation abroad, then no Swiss tax...).
I currently work in Oman and am paid out of the UK. I pay no tax because there is no income tax in Oman, and I'm non-resident for tax purposes in the UK. It is possible for me to switch to being paid in USD out of Dubai instead.

If and when I move to Switzerland it will be to raise a family, so my centre of vital interests will be within Switzerland.
Reply With Quote
Reply

Tags
foreign earnings tax




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Tax at source for foreign employees of foreign companies? ichthyst Finance/banking/taxation 1 17.03.2008 16:20
Tax on foreign house MrMert Finance/banking/taxation 1 30.12.2007 23:09
Starting a Swiss firm with foreign income, what a re tax and legal implications? dcribb Business & entrepreneur 9 12.07.2007 13:07
Tax on overseas earnings Fahle Finance/banking/taxation 8 10.06.2007 18:51
Swiss tax on overseas earnings DavidInBern Finance/banking/taxation 2 19.01.2007 16:20


All times are GMT +2. The time now is 19:15.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2021, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0