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Old 19.07.2014, 23:53
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Different witholding tax rate across cantons

Hi,
I searched in the forum but could not find a definitive answer. it is a known fact that the witholding tax rate is different for each canton (Zug canton being most attractive with less tax rate).
My question is what are the advantages of staying in a higher taxed canton apart from reasons like it is nearer to your work place.
Does a higher taxed canton provide better living standards?
or is the cost of living less in such higher taxed cantons? in terme of rents, cost of groceries, insurance costs etc...
If there are no such explicit benefits, it is easier to assume that eveybody who has freedom of mobilit with respect to thier permits would live in Zug.but clearly this is nit the case.
I am Non EU with a B permit and can live in a differnt canton than my work canton. I am thinking of moving but this huge difference of tax rate between my current and future cantons has held me back( i will pay more in the future canton)
I dont mind this as long as i know that there are other benefits offered by the highe taxed canton. if they do exist, can anybody tell me what these are?

Cheers
Happycreature
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Old 20.07.2014, 00:02
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Re: Different witholding tax rate across cantons

Usually it is true that:

High tax = lower cost of living
Lower tax = higher cost of living

One advantage of being able to afford living in low tax upmarket area is that you will be surrounded by the people who run their own businesses and it's beneficial for ones education and being exposed to such. The principle usually applies in this world that better connected you are with influential individuals, higher your chances of upgrading the social status. So here you go
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Old 20.07.2014, 00:20
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Re: Different witholding tax rate across cantons

That, as above

High tax = lower cost of living
Lower tax = higher cost of living
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Old 20.07.2014, 00:23
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Re: Different witholding tax rate across cantons

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That, as above

High tax = lower cost of living
Lower tax = higher cost of living
Lower taxes also means less services like snow clearing at weekends or even at all.
Probably the only real variable is rent, other costs will not be that different.
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Old 20.07.2014, 00:38
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Re: Different witholding tax rate across cantons

Nope- snow clearing goes on here day and night- for the smallest of country lanes. Rents and many things are so much cheaper, like houses with space and land- also like wood for the stove, fruit and veg, menu du jour, hairdresser's, and 100s of services. Small school classes, subsidies for childcare for all, and so much more. Not easy to balance all the + and - - as they vary so much from area to area.

What you gain on the swings, you so often lose on the roundabout.
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Old 20.07.2014, 00:40
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Re: Different witholding tax rate across cantons

OK. it looks like ther are no explicit benefits of staying in a higher taxed canton.
the benefit of lower rent cannot be considerd as an explicit advantage because it depends on each individual. what is cheaper for somebody may be expensive for others. i heard that insurane costs are lower in higher taxed cantons. is this true?
by the way, i also heard that one must obtain permission from the receiving canton before they can actually move. does anybody know if there exists a form or such an office in the receiving canton where i must ask for such permission.
the receiving canton in this case will be St.Gallen.

Cheers
Happycreature
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Old 20.07.2014, 00:51
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Re: Different witholding tax rate across cantons

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Nope- snow clearing goes on here day and night- for the smallest of country lanes. Rents and many things are so much cheaper, like houses with space and land- also like wood for the stove, fruit and veg, menu du jour, hairdresser's, and 100s of services. Small school classes, subsidies for childcare for all, and so much more. Not easy to balance all the + and - - as they vary so much from area to area.

What you gain on the swings, you so often lose on the roundabout.
Your in a high tax canton & you get lots of snow clearing, which is exactly my point. Of course you will get subsidies for child care paid from other peoples high taxes.

I have seen mens haircuts in ZH for 22 CHF, ladies from 35 CHF, are they really much cheaper in your village?
Having spent about 100 nights in the Jura staying in hotels & restaurants I never thought they were obviously any cheaper than in other places I stayed. Migros & CoOp seem to have the same prices.
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Old 20.07.2014, 00:56
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Re: Different witholding tax rate across cantons

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Lower taxes also means less services like snow clearing at weekends or even at all.
Probably the only real variable is rent, other costs will not be that different.
Neither this weekend nor the other we needed snow clearing service
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Old 20.07.2014, 14:23
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Re: Different witholding tax rate across cantons

Each canton and Gemeinde sets it's own budget, hopefully reflecting the needs and wishes of (the voting majority of) local taxpayers.

It's not quite as simple as low/high taxes = fewer/more services.

How you feel about the tax/service tradeoff depends on which services you use and value, in relation to your taxable income.

Also, a Gemeinde/canton may be high or low tax at income level X but tax neutral at income level Y.

For instance see this thread, linking a tax map from the Tagi, showing the tax rates at various income levels:
Interactive Tax Map

I live in the second lowest tax Gemeinde in Switzerland - and receive all the services I need, plus many I don't but nonetheless value as important to the community. The local community, not a centralized authority, decides what projects are worth funding and which are not - and sets tax revenue accordingly.

The local school has a very good reputation, roads are well-maintained, snow is cleared, the community is clean, etc. Despite low taxes - as these are considered important to most (voting) tax payers.

Some services, those that reflect usage or benefit a smaller group, are on a 'user pays' basis. For instance garbage and water usage is by volume, dog tax is by number of mutts - which I believe is fair.

The community has been able to provide the services the (majority of voting) residents believe are needed depsite the low taxes. Or rather, largely because of the low taxes - as those taxes have attracted a number of HNW residents to the community, and those folks pay significantly into the community coffers. Far, far more than the average resident does.

----

Things might be changing, though, with the new 'Tax Harmony' process. It's far too soon to see any effects, but the local papers are full of articles expressing concern. As a canton that takes in high revenues (despite offering low tax rates ) SZ is now obliged to fork over a portion - this last year 162 million - to low revenue cantons.

Whether that means that SZ will have to raise taxes to fund services to make up for revenues that are being diverted, and how that will affect the community, is the question on everyone's minds.
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Old 20.07.2014, 19:20
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Re: Different witholding tax rate across cantons

I was under the impression the low tax rate in Zug for individuals was because of the huge income from the multi-nationals headquartered there?
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Old 20.07.2014, 19:37
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Re: Different witholding tax rate across cantons

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Your in a high tax canton & you get lots of snow clearing, which is exactly my point. Of course you will get subsidies for child care paid from other peoples high taxes.

I have seen mens haircuts in ZH for 22 CHF, ladies from 35 CHF, are they really much cheaper in your village?
Having spent about 100 nights in the Jura staying in hotels & restaurants I never thought they were obviously any cheaper than in other places I stayed. Migros & CoOp seem to have the same prices.
Migros and Coop prices are indeed the same- but rents are much much lower, and fruit and veg very cheap on local markets, a menu du jour a fraction of what they are in GE - and so much more. Plus of course the availability of eating and shopping in nearby France for much of the Jura. The main difference though is the price of rents, and more importantly the space and outdoor space available for families and/or pets, and those who like said space . We have French families who choose to live here as it is cheaper to rent or buy land than in 'frontalier' France- and several newcomers from Geneva and Bern who found they could buy a home (perhaps not an investment, but they don't care) for a very reasonable price and without neighbours breathing down their neck. Sheer bliss.
I certainly do not get child subsidies- but I'm happy to pay for them, and small classes in our schools too. Horses for courses- it is obviously not for you, and that is fine

LOL- I'd love to hear from a woman who has her hair cut and blown for 35CHF in Zurich- I pay 48CHF in my village which isn't bad- I pay the same in a small town in the UK, but in £. OH pays CHF18 at the same hairdresser's - mind you in hasn't got much hair but she trims his eyebrows, nose and ears LOL.
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Old 20.07.2014, 19:54
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Re: Different witholding tax rate across cantons

I live in a low tax rate canton, and cost of living is also quite low, as are rents.

Tom
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Old 20.07.2014, 20:07
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Re: Different witholding tax rate across cantons

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Migros and Coop prices are indeed the same- but rents are much much lower, and fruit and veg very cheap on local markets, a menu du jour a fraction of what they are in GE - and so much more. Plus of course the availability of eating and shopping in nearby France for much of the Jura. The main difference though is the price of rents, and more importantly the space and outdoor space available for families and/or pets, and those who like said space . We have French families who choose to live here as it is cheaper to rent or buy land than in 'frontalier' France- and several newcomers from Geneva and Bern who found they could buy a home (perhaps not an investment, but they don't care) for a very reasonable price and without neighbours breathing down their neck. Sheer bliss.
I certainly do not get child subsidies- but I'm happy to pay for them, and small classes in our schools too. Horses for courses- it is obviously not for you, and that is fine
I agree that this is the case in some areas of the higher taxed cantons ( such as where you are) but it's not the case for the canton as a whole.
Rents are not really that much cheaper when you go to the more densely populated areas such as Neuchatel itself and it's not quite so easy to nip over the border to France either.
Same goes for Geneva and Lausanne which are both in the higher taxed cantons but the cost of living there is still pretty high.

There's more to it than just the cost of living I'm my opinion, language and proximity to work also play a large part when deciding where to live.
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Old 20.07.2014, 20:10
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Re: Different witholding tax rate across cantons

All the French speaking cantons are high tax, only 3 low tax kantons in the German part, ZH being no 3
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Old 30.07.2014, 10:00
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Re: Different witholding tax rate across cantons

Hello,
Can somebody please clarify where to ask permission in the new canton to move there?

Cheers
Happycreature
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Old 30.07.2014, 10:03
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Re: Different witholding tax rate across cantons

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Hello,
Can somebody please clarify where to ask permission in the new canton to move there?

Cheers
Happycreature
In Gemeinde (municipality) where you intend to live.
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Old 30.03.2016, 17:20
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Re: Different witholding tax rate across cantons

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For instance see this thread, linking a tax map from the Tagi, showing the tax rates at various income levels:
Interactive Tax Map
.
Cruising through old topics, that interactive map simply destroyed away the conception I had based on my colleagues' comments for years...


Living in Zurich is actually cheaper in terms of income taxation that in Vaud or Fribourg cantons!!!




I even seen "Zoug" canton, with a tax percentage almost touching the ideal tax rate of 0%

Ok for Zoug, renting/buying is super expensive. But what's the deal with Zurich Canton?

Why are salaries much higher then?

(By the way, the curiosity trigger was this https://translate.google.com/transla...sible-17412285.
Something to explain that property prices average prices have raised by 36% since 2002 and salary have not followed. They used a scenario of a family with 1 child and 90K income are hardly able to afford a property in 12% of communes. Another family, 2 children, 100K income, they can't buy in 66% of the Swiss territory. Back 14 years ago, they could have afforded a property in 70% of the territory.)

Last edited by CorsebouTheReturn; 30.03.2016 at 17:29. Reason: adding link
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Old 30.03.2016, 18:29
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Re: Different witholding tax rate across cantons

Lower tax Kantons are only half of the story as different municipalities in the kantons also have lower rates. Some of the lowest that are within 35 minutes from Zurich are Freienbach, Baar, Zug and in some of these communities you might be happier and better shielded from zurich marketing strategies and therefore less prone to spending money in order to buy happiness.

However if you must commute to zurich for work than you must have an income higher than 120k in order to get the full tax savings considering the cost of commute...
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Old 30.03.2016, 19:16
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Re: Different witholding tax rate across cantons

I think that starting this year (1.1.2016) the tax relief on commuting costs have been lowered to about 70 Km or Sfr 30 per day, so it will become expensive to commute a long way to work.

Some villages have billionaires living in them, and these can be paying a large amount of tax, enabling a lower tax bill for everyone (The very rich people may be negotiating a tax lump sum, but it can still be substantial compared to a lower manager's tax bill)

I think many of the companies in Zug are paying most of their taxes in Ireland and Luxembourg...
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Old 31.03.2016, 01:47
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Re: Different witholding tax rate across cantons

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I think that starting this year (1.1.2016) the tax relief on commuting costs have been lowered to about 70 Km or Sfr 30 per day, so it will become expensive to commute a long way to work.

Some villages have billionaires living in them, and these can be paying a large amount of tax, enabling a lower tax bill for everyone (The very rich people may be negotiating a tax lump sum, but it can still be substantial compared to a lower manager's tax bill)

I think many of the companies in Zug are paying most of their taxes in Ireland and Luxembourg...
As far as I know corporate taxes in Zug are lower than those of Ireland.
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