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Old 30.06.2014, 11:30
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I messed up my taxes - what to do now?

I took a contract position in Zurich in 2012 for a year (four 3 month contracts) and my incomes was taxed at source. I figured that the full amount I would owe was already being taken out of my salary and so filing a return would simply be a way for me to get a refund at best. I guess I completely misunderstood how tax at source worked. I figured they got their money already.

I'm now back in CH -Basel this time. I just got at tax bill for over 20K ..! I have to look at my pay slips, but they claim I only had withheld 7K more or less. So if this is true, then it would seem the contracting firm that hired me withheld very little compared to my income, probably in an attempt to make my net pay seem higher than it is ..

Is this bill entirely punitive or is it a pretty accurate reflection of my taxes owed relative to income? I would have had very little in terms of deductions. Are they generally OK with paying in installments?

Thanks in advance ..
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Old 30.06.2014, 11:35
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Re: I messed up my taxes - what to do now?

Get a tax agent to sort it out. We use www.colfina.ch

If you earnt under total 120k for the year, then quite likely you did not need to lodge a tax return. Whether the 20k bill is correct depends totally on what you earnt and whole lot of variables like where you lived, whether you have and dependent and any other deductions.

If the employer failed to deduct properly tax-at-source then they actually have to fix it. It is not as simple as you just 'topping up'. Alternatively, they only took out the compulsory deductions like Unemployment and social insurance and the pension fund component, and failed completely to properly deduct tax.

For a 20k tax bill in 12 months you must have earnt quite a lot...?
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Old 30.06.2014, 11:41
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Re: I messed up my taxes - what to do now?

Thanks for the information. I'll contact them today. Yes, I guess I did earn a bit .. but not THAT much; just a little shy of 200K gross. Anyway, I'll see what they say ..

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Get a tax agent to sort it out. We use www.colfina.ch

If you earnt under total 120k for the year, then quite likely you did not need to lodge a tax return. Whether the 20k bill is correct depends totally on what you earnt and whole lot of variables like where you lived, whether you have and dependent and any other deductions.

If the employer failed to deduct properly tax-at-source then they actually have to fix it. It is not as simple as you just 'topping up'. Alternatively, they only took out the compulsory deductions like Unemployment and social insurance and the pension fund component, and failed completely to properly deduct tax.

For a 20k tax bill in 12 months you must have earnt quite a lot...?
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Old 30.06.2014, 11:58
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Re: I messed up my taxes - what to do now?

Unfortunately this may well be true. If you only paid 7k for a gross salary of almost 200k, then there could be a hefty tax bill waiting for you. I would also contact your previous employer as as long you are on a L or B permit, they are responsible for deducting the taxes.
Good luck!
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Old 30.06.2014, 12:02
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Re: I messed up my taxes - what to do now?

Try this calculator here: http://www.estv2.admin.ch/d/dienstle...uerrechner.htm.

Pick your canton and year.

I punched in 200K as the first income and just hit the "Rechnen" button - It gave me an answer of 36K

So all in all it sounds likely that you've seriously underpaid your taxes.
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Old 30.06.2014, 12:26
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Re: I messed up my taxes - what to do now?

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Thanks for the information. I'll contact them today. Yes, I guess I did earn a bit .. but not THAT much; just a little shy of 200K gross. Anyway, I'll see what they say ..
As you're now in Basel, I can recommend my accountant. http://www.stadttreuhand.ch/ He speaks good English, and knows the Swiss tax systems very well.
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Old 30.06.2014, 12:38
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Re: I messed up my taxes - what to do now?

When you are not on a C permit the employer is responsible for collecting taxes and passing them on to the tax authority. The rate of taxation is fixed at an average for that canton.

If the tax office notice that taxes have not been paid, I wonder if the company would be obliged to pay the unpaid tax, and then the company would have to sue the employee? Or is it the case the tax office deal directly with the employee to claim the unpaid tax?

To the OP Shiny_New_Kid, please come back and let us know the result.
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Old 30.06.2014, 12:46
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Re: I messed up my taxes - what to do now?

It sounds like it could have been a contracting issue and maybe an assumption that the employee will handle it.

When my husband's employer failed to calculate and deduct the source tax properly, they had to fix it from their end and recoup the cost from the employee by arrangement... But in this case because the income is so high, it might be that it was assumed that it would be sorted out with the tax return,because mandatory filing is required over 120k anyway.

I think it was very naive to assume that 7k on 200k was appropriate tax. Quite likely it is just the pension and social security deductions and they did not take out the quellensteuer (source tax) at all!
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Old 30.06.2014, 13:01
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Re: I messed up my taxes - what to do now?

Seems like a fairly common situation where the employer doesn't calculate the tax correctly. The same thing happened to me, I was advised by my HR department that they had undercalculated my tax for the previous two years and so I would have to pay them 15k as soon as possible! I think most people assume that if the employer is supposed to deduct the tax from your salary, that they will do it correctly. Obviously that's not the case, even though my company is supposedly a tax consultancy (big 4)...
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Old 30.06.2014, 13:09
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Re: I messed up my taxes - what to do now?

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I think it was very naive to assume that 7k on 200k was appropriate tax. Quite likely it is just the pension and social security deductions and they did not take out the quellensteuer (source tax) at all!
You mean higher rate tax is more than 3.5%
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Old 30.06.2014, 14:05
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Re: I messed up my taxes - what to do now?

I'm at work so I haven't looked at my payslips yet, but I'm pretty sure I paid more than 700 CHF in tax per month. I do seem to remember that a hefty chunk was being taken out of my pay every month, but I need to look over the slips to what was what. I never really paid that much attention to the individual line items.

I just don't see how an employer could make such a huge mistake without doing it on purpose. I'll keep posting on this thread as things progress if nothing else to at least help out anyone else who was as careless as I ..
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Old 30.06.2014, 14:17
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Re: I messed up my taxes - what to do now?

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As you're now in Basel, I can recommend my accountant. http://www.stadttreuhand.ch/ He speaks good English, and knows the Swiss tax systems very well.
Thanks. I have an appointment with him tomorrow.
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Old 30.06.2014, 14:36
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Re: I messed up my taxes - what to do now?

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I'm at work so I haven't looked at my payslips yet, but I'm pretty sure I paid more than 700 CHF in tax per month. I do seem to remember that a hefty chunk was being taken out of my pay every month, but I need to look over the slips to what was what. I never really paid that much attention to the individual line items.

I just don't see how an employer could make such a huge mistake without doing it on purpose. I'll keep posting on this thread as things progress if nothing else to at least help out anyone else who was as careless as I ..
Believe me, 700 CHF tax per month and a salary of up to 200k per year unfortunately is a mismatch. If you use the link Slaphead posted, you can enter your data and will most likely find out that you have been underpaying your taxes. So as others advised, get a tax expert and help!

Last edited by roegner; 30.06.2014 at 14:37. Reason: Addition
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Old 30.06.2014, 14:42
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Re: I messed up my taxes - what to do now?

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Believe me, 700 CHF per month and a salary of up to 200k per year unfortunately is a mismatch. If you use the link Slaphead posted, you can enter your data and will most likely find out that you have been underpaying your taxes. So as others advised, get a tax expert and help!
If the payslips say 700 CHF, then yes. But until I go back and take a look, I'll have a hard time knowing for sure. I guess I assumed that "taxed at source" meant just that - they get their taxes in the beginning as a security against foreigners leaving the country with a big tax bill. But from the looks of of it, it's no different than an arbitrary estimation. The contracting firm could have estimated 500 CHF a month, or 100 CHF.
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Old 30.06.2014, 14:45
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Re: I messed up my taxes - what to do now?

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If the payslips say 700 CHF, then yes. But until I go back and take a look, I'll have a hard time knowing for sure. I guess I assumed that "taxed at source" meant just that - they get their taxes in the beginning as a security against foreigners leaving the country with a big tax bill. But from the looks of of it, it's no different than an arbitrary estimation. The contracting firm could have estimated 500 CHF a month, or 100 CHF.
it is not an estimation.
you have a certain tax class. for each class there are tables with the gross monthly earnings and the corresponding tax at source percentage.
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Old 30.06.2014, 14:52
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it is not an estimation.
you have a certain tax class. for each class there are tables with the gross monthly earnings and the corresponding tax at source percentage.
So how could this have been so messed up? Should the employer have known to deduct the correct amount?

Is it possible that the employer estimated my taxes based on working there only 3 months since I kept getting 3 month renewable contracts? In that case they never adjusted the earnings upwards for the following quarters.

Last edited by 3Wishes; 30.06.2014 at 21:34. Reason: merging successive posts
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Old 30.06.2014, 14:57
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Re: I messed up my taxes - what to do now?

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Is it possible that the employer estimated my taxes based on working there only 3 months since I kept getting 3 month renewable contracts? In that case they never adjusted the earnings upwards for the following quarters.
no. it is based on your monthly earnings
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Old 30.06.2014, 16:50
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Re: I messed up my taxes - what to do now?

Ok so I got my tax recap for the year 2012. It shows that I paid 16.3K at source and not 7K as the tax letter says. I made 155K net after contributions to all the pillars. I ran that through the tax calculator and I come up with a 16.3K liability, which is what was deducted at source.

That tells me the tax people might have pulled those numbers from anywhere. Hopefully we'll get that straightened out with the tax guy tomorrow.
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Old 30.06.2014, 17:01
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Re: I messed up my taxes - what to do now?

Where did you live at the time? If you get 155k net from your salary 16,3k taxes seems really low.
The cheapest Kanton I could see on Comparis was Kanton Schwyz and with a salary of monthly 15k CHF (as an example = 180k per annum gross) you still would have paid 20k taxes.
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Old 30.06.2014, 17:02
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Re: I messed up my taxes - what to do now?

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Ok so I got my tax recap for the year 2012. It shows that I paid 16.3K at source and not 7K as the tax letter says. I made 155K net after contributions to all the pillars. I ran that through the tax calculator and I come up with a 16.3K liability, which is what was deducted at source.
http://www.steueramt.zh.ch/internet/...ung/npers.html
CHF 8'083.60 Federal Tax
+ CHF 26'113.45 State and Commune Tax.
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