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Old 11.03.2018, 18:06
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Nanny money for tax return?

Hello,

We have used friends and family members from abroad and gave them "pocket money" over the previous year (2017) when they were helping us at home taking care of the children. The money is roughly 4000CHF for the whole year to 3 different persons (no one stayed over 3 months in Switzerland).

Is there any way to declare this as daycare cost in the tax return for 2017? There is no official receipt for this money (and I hope this has not been illegal), so would there be a way to declare it in the tax return? What if we create letters that they sign? Do you think that this would be acceptable at the Steueramt?

Many thanks in advance for any help!
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Old 11.03.2018, 18:17
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Re: Nanny money for tax return?

Someone hopefully knows better than me, but tourists aren't allowed to work here and since you gave them money that will seem like payment for work - illegal work as well. Best to write it off and forget it.
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Old 11.03.2018, 18:22
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Re: Nanny money for tax return?

According to this link (translated):

"The effective costs must be proven by means of receipts. Subsidies are deducted from the costs incurred. It is helpful to provide a list of expenses, which is accompanied by the detail documents.

In addition to proving the costs, it must be clear to the taxing authority whether the claim for child care deduction is in fact justified. The reason must be proven (workload of parents, education and training, illness or accident).

The amount which the parents identify as costs must be recorded or taxed as receipts or income by the recipient. If, for example, the grandparents are paid for providing care, they must take the appropriate income in the tax return. At most, the duties of an employer must be observed (salary statement, social security, etc.)"

https://www.bdo.ch/getmedia/d1518399..._nr_3.pdf.aspx
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Old 11.03.2018, 18:36
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Re: Nanny money for tax return?

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According to this link (translated):
The amount which the parents identify as costs must be recorded or taxed as receipts or income by the recipient. If, for example, the grandparents are paid for providing care, they must take the appropriate income in the tax return. At most, the duties of an employer must be observed (salary statement, social security, etc.)"

https://www.bdo.ch/getmedia/d1518399..._nr_3.pdf.aspx
Thanks for the reply Mullhollander.

I was about to write it off (as you suggested) but my wife just reminded me two facts :
a) We paid one additional person (around 1K) who resides in Switzerland and did not have any other job in 2017. Could we declare that? I know that there is a threshold of income (don't remember the actual number) where the person who helped doesn't have to declare this as income, correct?

b) We also paid some daycare money whilst being abroad during vacations. Would that count somehow? How can we prove it?
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Old 11.03.2018, 18:39
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Re: Nanny money for tax return?

If you pay someone to work for you, you must take on the full responsibilities of an employer:
  • employment contract,
  • social security (AHV) contributions,
  • unemployment insurance contributions,
  • accident insurance, and,
  • if applicable (for an employee with less than a C-permit), source tax.

Anything less than this is, yes, illegal.
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Old 11.03.2018, 18:56
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Re: Nanny money for tax return?

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Someone hopefully knows better than me, but tourists aren't allowed to work here and since you gave them money that will seem like payment for work - illegal work as well. Best to write it off and forget it.
mostly this!

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...
and which you might be required to 'employ' your relatives properly in CH, which would imply you may need permits and you would also certainly have to pay the CH government both the state and 'corporate' (P1+P2) pensions, 'employees' accident insurance etc.

probably best to just eat it for now!
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Old 11.03.2018, 19:04
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Re: Nanny money for tax return?

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I was about to write it off (as you suggested) but my wife just reminded me two facts :
a) We paid one additional person (around 1K) who resides in Switzerland and did not have any other job in 2017. Could we declare that? I know that there is a threshold of income (don't remember the actual number) where the person who helped doesn't have to declare this as income, correct?

b) We also paid some daycare money whilst being abroad during vacations. Would that count somehow? How can we prove it?
my opinion would be that with the what you describe here, is that you are closer in employment leagal terms to 'employing' private house cleansers for which there is a good body of tax material that covers this most of which has been sumarised above.

a proper tax consulation is probably best at this point.
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Old 11.03.2018, 19:13
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Re: Nanny money for tax return?

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my opinion would be that with the what you describe here, is that you are closer in employment leagal terms to 'employing' private house cleansers for which there is a good body of tax material that covers this most of which has been sumarised above.

a proper tax consulation is probably best at this point.
However, said "private house cleansers" didn't have permits.
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Old 11.03.2018, 19:26
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Re: Nanny money for tax return?

Just forget about it for the involved year, and for other years if you want to deduct amounts read up about the rules and do it properly from start. Instead of paying black and hoping for an extra buck on top of this.
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Old 11.03.2018, 20:01
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Re: Nanny money for tax return?

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If you pay someone to work for you, you must take on the full responsibilities of an employer:
  • employment contract,
  • social security (AHV) contributions,
  • unemployment insurance contributions,
  • accident insurance, and,
  • if applicable (for an employee with less than a C-permit), source tax.

Anything less than this is, yes, illegal.
This is the main reason their are so many workers not in the System. It is [expletive deleted] complicated for the ‘employer’ to do it by the rules.

They really need to simplify the bureaucracy for workers doing less than 8 hrs/week.
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Old 11.03.2018, 20:07
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Re: Nanny money for tax return?

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However, said "private house cleansers" didn't have permits.
I acknowledged that when I referenced you with "mostly this".

my point was that OP should be focusing on the employment law around "private house cleaners" which usually starts with a permit and would be a similar basis for what they should have done form the outset. that body of employment law will also describe the implications of not adhereing to it correctly.
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Old 11.03.2018, 20:15
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Re: Nanny money for tax return?

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This is the main reason their are so many workers not in the System. It is [expletive deleted] complicated for the ‘employer’ to do it by the rules.

They really need to simplify the bureaucracy for workers doing less than 8 hrs/week.

and the rules are there to protect the employees. you are are well protected in your big time 'professional' job so why not the the small time 'unprofessionals'? I agree though that the redtape overhead is a little high but most of it is there for a reason. it's called social responsibilty.
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Old 11.03.2018, 20:43
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Re: Nanny money for tax return?

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and the rules are there to protect the employees. you are are well protected in your big time 'professional' job so why not the the small time 'unprofessionals'? I agree though that the redtape overhead is a little high but most of it is there for a reason. it's called social responsibilty.
An effect of to much rulings with hardly any to none active enforcement can be that employers choose to not abide to them and in markets where there is more offering than demand such often leads to employees accepting such resulting in the opposite of what the rules want to achieve.

The low tax in this country offers an amazingly great opportunity to have black work on a very low level, it be a shame if the rules are to complicated for many so black work becomes a big thing again. If I look at some other countries it has nothing to do with the rules since they are incredible simple. (just pay cash, and unto a couple of thousands a year hardly to none bookkeeping is involved.) but the high tax rate and deductions on rental help and healthcare subsidies are the cause to work black.

(disclaimer: I have absolutely no clue about numbers on this in Switzerland.)
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Old 11.03.2018, 21:45
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Re: Nanny money for tax return?

Hello all,

Thanks for the replies. A few clarifications if I may.

1) By NO MEANS did we want to do something illegal. And I understand that ignorance is not an excuse.
2) We didn't need nanny care for so many hours hence it made more sense for us to fly relatives and friends for a few weeks here and there and pay them a bit instead of hiring a professional nanny.
3) Same goes for the friend who leaves in Switzerland. They study, they needed a bit of pocket money so it made more sense to help them rather than finding a nanny for a few hours here and there that we didn't know/trust.

We have done the search and found nannies offering services for a few hours (we just didn't hire them because of lack of trust and not requiring many hours of care). What would be the legal way to do it? What kind of contract do you need to draw and what contributions to pay and to whom for e.g. 2 hours 3 times a week?

Finally, in what category does the money that we paid abroad for childcare fall into? Could we not use this as childcare cost at all?

PS. I have no problem writing the childcare cost for 2017 off, I am just trying to understand here. Thanks to ll for the info
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Old 11.03.2018, 23:04
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Re: Nanny money for tax return?

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Hello all,

Thanks for the replies. A few clarifications if I may.

1) By NO MEANS did we want to do something illegal. And I understand that ignorance is not an excuse.
2) We didn't need nanny care for so many hours hence it made more sense for us to fly relatives and friends for a few weeks here and there and pay them a bit instead of hiring a professional nanny.
3) Same goes for the friend who leaves in Switzerland. They study, they needed a bit of pocket money so it made more sense to help them rather than finding a nanny for a few hours here and there that we didn't know/trust.

We have done the search and found nannies offering services for a few hours (we just didn't hire them because of lack of trust and not requiring many hours of care). What would be the legal way to do it? What kind of contract do you need to draw and what contributions to pay and to whom for e.g. 2 hours 3 times a week?

Finally, in what category does the money that we paid abroad for childcare fall into? Could we not use this as childcare cost at all?

PS. I have no problem writing the childcare cost for 2017 off, I am just trying to understand here. Thanks to ll for the info
It is very simple, you are demanded as an employer to register the employment by Citizens from EU-25/EFTA states at least one day before it starts. You failed to do this, this is illegal. And putting illegally paid salary on a tax form is about as dumb as things can get.

We already told you that you cannot deduct this money since it is black labour.
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Old 12.03.2018, 08:46
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Re: Nanny money for tax return?

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It is very simple, you are demanded as an employer to register the employment by Citizens from EU-25/EFTA states at least one day before it starts. You failed to do this, this is illegal. And putting illegally paid salary on a tax form is about as dumb as things can get.

We already told you that you cannot deduct this money since it is black labour.
I don't know why you are reiterate something that I am not intending to do.

Perhaps you didn't read my message carefully, but
a) I am trying to understand, not condone to illegal behaviour
b) see how to do it the correct way in the future and
c) learn; e.g. could I declare somehow the money I gave when I was on holidays (abroad (outside Switzerland)) as nanny child care cost?

thanks again
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Old 12.03.2018, 08:51
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Re: Nanny money for tax return?

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I don't know why you are reiterate something that I am not intending to do.
Something you already did
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Old 12.03.2018, 09:04
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Re: Nanny money for tax return?

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This is the main reason their are so many workers not in the System. It is [expletive deleted] complicated for the ‘employer’ to do it by the rules.

They really need to simplify the bureaucracy for workers doing less than 8 hrs/week.
It is simplified my dear friend: https://www.svazurich.ch/hausangestellte
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Old 12.03.2018, 09:15
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Re: Nanny money for tax return?

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b) see how to do it the correct way in the future and
c) learn; e.g. could I declare somehow the money I gave when I was on holidays (abroad (outside Switzerland)) as nanny child care cost?
b) See https://www.svazurich.ch/hausangestellte and if you employ foreign friends also https://awa.zh.ch/internet/volkswirt...verfahren.html

c) As it was holiday there was no need for day care. It was your free time and not related to employment or education (for ex. language course). Hence it is not tax deductible. See Wegleitung 2017 for Canton Zurich tax. Page 22, explanation to Item 16.6 https://www.steueramt.zh.ch/internet...017_HA+DEF.pdf
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Old 12.03.2018, 10:24
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Re: Nanny money for tax return?

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b) see how to do it the correct way in the future and
In my case (poor German, little knowledge of the pension/insurance/social security systems) I used the service provided by quitt.ch.
It's an added cost, but they take care of absolutely everything, and they have good deals with accident/home insurance companies, so at the end of the day it's probably a bit cheaper than what it seems.
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