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-   -   Tax return question (https://www.englishforum.ch/finance-banking-taxation/288476-tax-return-question.html)

FedeM 05.12.2018 20:50

Tax return question
 
Hi everyone.
Question: let's suppose JON earns 120k a year. He receives 10k gross a month, that equals to around 7500fr net because is under B permit and has withholding tax (ok, I know over 120k you are on C...)

Let's suppose JON moved to Switzerland only in July, at the end of the year JON will only have an overall yearly compensation of 6*10k=60.000 gross, but he paid taxes like he had 120k.

1. Is JON eligible to receive tax returns, since the overall income of the year is 60k and not 120k?
2. Additionally, at the end of the year JON put downs 6500fr in the 3rd pillar. Overall income will be 53.500, will be JON eligible to receive tax returns?
3. Additionally, JON has received a bonus of 10k in August, and was already taxed (as overall = 130k). Will be JON eligible to receive tax returns having paid for 120k->130k instead of 60k->70k?

Someone told me:
R1. NO, because tax are calculated on monthly basis
R2. YES, because the overall income will be 113.500 (but not 53500).
R3. NO, because R1
Looks weird to me.

roegner 05.12.2018 20:56

Re: Tax return question
 
Quote:

Originally Posted by FedeM (Post 3020376)
Hi everyone.
Question: let's suppose JON earns 120k a year. He receives 10k gross a month, that equals to around 7500fr net because is under B permit and has withholding tax (ok, I know over 120k you are on C...)

Let's suppose JON moved to Switzerland only in July, at the end of the year JON will only have an overall yearly compensation of 6*10k=60.000 gross, but he paid taxes like he had 120k.

1. Is JON eligible to receive tax returns, since the overall income of the year is 60k and not 120k?
2. Additionally, at the end of the year JON put downs 6500fr in the 3rd pillar. Overall income will be 53.500, will be JON eligible to receive tax returns?

Someone told me:
1. NO, because tax are calculated on monthly basis
2. YES, because the overall income will be 113.500 (but not 53500).
Looks weird to me.

Over 120k you are not automatically on a C permit.

Depending on the Kanton you can do a tax return, actually have to do it.

Your income is not reduced by the amount in 3A, it reduces your tax liability and not for the whole amount.

https://www.steueramt.zh.ch/internet...erechnung.html

https://www.steueramt.zh.ch/internet...ragen/faq.html

aSwissInTheUS 05.12.2018 20:58

Re: Tax return question
 
You are on C when you have a permit C. You do not get C because you earn above a certain threshold.

But people on C, Swiss, person with an income above a certain Threshold, people married to persons with C or to a Swiss, and some other person meeting other criteria set by the canton have to do a full tax return. Those who have, but are still on permit B or L might still be subject to tax at source. In this case it is called "Sicherungssteuer".

JON will most likely receive a full tax return form somewhen next year, as the projected gross income will be 120k or more (except JON lives in Geneva).

Note: There is no filed on the full tax return where you can enter the tax at source paid. The tax authority knows how much you paid. Once the full tax is known and assessed you will get either a bill for the difference or a refund. This can take several months up to years.

Full details: https://www.steueramt.zh.ch/dam/fina..._nr_28-851.pdf

FedeM 05.12.2018 21:01

Re: Tax return question
 
Thanks for your answer, JON lives in Zurich.
The main point I'd like to understand is that, for taxes, here they consider the "Solar Year" like in Italy or in Spain, or if they really use monthly basis.

Accordingly on the example above, if JON starts in July and pay withholding for 120k salary but at the end of the year only has 60k, is should be able to receive a lot of tax back.

PS: unfortunately JON doesn't speak a single word of German, so pretty hard to read pdfs :)

roegner 05.12.2018 21:06

Re: Tax return question
 
Well, JON can have a chat with the tax office, nice people and there are some who speak english.

The income is extrapolated for the year so yes, you most likely will have to do a tax return (not sure anymore if ZRH is 120k or 126k).

So, if your income over the half year would mean that for a full year it is over the threshold, yes, there comes the tax return.

I think there is a sticky somewhere explaining how to do your tax return, as it is quite easy in switzerland

aSwissInTheUS 05.12.2018 21:10

Re: Tax return question
 
Quote:

Originally Posted by FedeM (Post 3020387)
Accordingly on the example above, if JON starts in July and pay withholding for 120k salary but at the end of the year only has 60k, is should be able to receive a lot of tax back.

No JON will most likely not get much back. Because the tax rate is calculated using the projected net income. That is a fair way to asses the tax rate. And also because he lives in Zürich City. If JON also works in the city he will have to brace for quite an extra bill.

Troublawesome 05.12.2018 21:10

Re: Tax return question
 
JON can use the search function

Mullhollander 05.12.2018 21:12

Re: Tax return question
 
Quote:

Originally Posted by FedeM (Post 3020387)
Thanks for your answer, JON lives in Zurich.
The main point I'd like to understand is that, for taxes, here they consider the "Solar Year" like in Italy or in Spain, or if they really use monthly basis.

Accordingly on the example above, if JON starts in July and pay withholding for 120k salary but at the end of the year only has 60k, is should be able to receive a lot of tax back.

PS: unfortunately JON doesn't speak a single word of German, so pretty hard to read pdfs :)

Canton Zurich's English-language flyer on source tax says:

"12. What does the retrospective assessment of withholding tax mean?
If the gross earnings of a person who is liable for withholding tax, in annualised terms, exceed the sum of CHF 120,000.00, a retrospective ordinary assessment of the entire income and assets of the spouses shall be conducted."

The above means that if a person has source tax withheld on gross income that exceeds CHF 120'000 annualized that a tax return should be filed. The source tax then becomes a withholding tax which is applied against the tax owed.

https://www.steueramt.zh.ch/dam/fina...t_qst15_en.pdf

FedeM 05.12.2018 21:13

Re: Tax return question
 
OK I think I exposed the question in a not proper way.

Another example:
Maria starts work on the 1st January in Italy, with withholding tax (like any employee), at 2500 gross month, receiving 1600 net.
At the end of March she resigns and totally stops working.
At the end of the year, Maria can claims the TOTAL tax back because 2500x3 salaries received is still under the no-tax area.


JON only has 60k salary income during the year, but he paid withholding like (in theory) will be 120k. Should receive de difference back, or is calculated on monthly basis (so not like Maria)?

FedeM 05.12.2018 21:14

Re: Tax return question
 
Quote:

Originally Posted by aSwissInTheUS (Post 3020392)
No JON will most likely not get much back. Because the tax rate is calculated using the projected net income. That is a fair way to asses the tax rate. And also because he lives in Zürich City. If JON also works in the city he will have to brace for quite an extra bill.

That is what I was trying to understand.
Thank you vm.

PS: what's about the extra bill because of ZH? Sounds new to JON.

Quote:

Originally Posted by Troublawesome (Post 3020394)
JON can use the search function

I will let him know. Thanks.

roegner 05.12.2018 21:16

Re: Tax return question
 
Quote:

Originally Posted by FedeM (Post 3020397)
OK I think I exposed the question in a not proper way.

Another example:
Maria starts work on the 1st January in Italy, with withholding tax (like any employee), at 2500 gross month, receiving 1600 net.
At the end of March he resigns and totally stops working.
At the end of the year, Maria can claims the TOTAL tax back because 2500x3 salaries received is still under the no-tax area.


JON only has 60k salary income during the year, but he paid withholding like (in theory) will be 120k. Should receive de difference back, or is calculated on monthly basis (so not like Maria)?

No idea if there has been a change in this procedure but I had to pay extra (started in June) because the amount deducted was less than the extrapolated amount. It is calculated on a yearly basis for your tax return and deducted on a monthly basis.

aSwissInTheUS 05.12.2018 21:17

Re: Tax return question
 
Italy is Italy, Switzerland is Switzerland.

Note, the net income and gross income are only projected over the whole year if the stay in Switzerland was less than the whole year. Apart from moving from and to abroad, this also is the case when a person dies. If one stays the whole year but works only part of it there will be no projection.

st2lemans 05.12.2018 21:18

Re: Tax return question
 
Quote:

Originally Posted by FedeM (Post 3020397)
JON only has 60k salary income during the year, but he paid withholding like (in theory) will be 120k. Should receive de difference back, or is calculated on monthly basis (so not like Maria)?

No.

Tom

st2lemans 05.12.2018 21:20

Re: Tax return question
 
Quote:

Originally Posted by aSwissInTheUS (Post 3020402)
Italy is Italy, Switzerland is Switzerland.

Note, the net income and gross income are only projected over the whole year if the stay in Switzerland was less than the whole year. Apart from moving from and to abroad, this also is the case when a person dies.

When I moved from ZH to TI, they had to wait one whole year before figuring out my taxes. :eek:

Just saying. ;)

Tom

FedeM 05.12.2018 21:24

Re: Tax return question
 
Quote:

Originally Posted by aSwissInTheUS (Post 3020402)
Italy is Italy, Switzerland is Switzerland.

Note, the net income and gross income are only projected over the whole year if the stay in Switzerland was less than the whole year. Apart from moving from and to abroad, this also is the case when a person dies. If one stays the whole year but works only part of it there will be no projection.

JON moved in Switzerland at the middle of the year, is exactly the case.
JON and myself (and Maria as well) are really thankful for your explanation. :)

Quote:

Originally Posted by st2lemans (Post 3020404)
When I moved from ZH to TI, they had to wait one whole year before figuring out my taxes. :eek:

Just saying. ;)

Tom

Italian influence (I'm Italian tho)? :D
PS: I received my first groan from you. :msncry:

st2lemans 05.12.2018 21:30

Re: Tax return question
 
It's Jan 1 to December 31, otherwise prorated.

Tom

aSwissInTheUS 05.12.2018 21:55

Re: Tax return question
 
Quote:

Originally Posted by FedeM (Post 3020405)
PS: I received my first groan from you. :msncry:

The first one hurts and its a tradition to get it from Tom.

Got one this week as well. Do not even know why:
https://www.englishforum.ch/transpor...at-expect.html

FedeM 05.12.2018 23:50

Re: Tax return question
 
Quote:

Originally Posted by aswissintheus (Post 3020415)
the first one hurts and its a tradition to get it from tom.

Got one this week as well. do not even know why:
https://www.englishforum.ch/transpor...at-expect.html

+1 :(

DUTCH 06.12.2018 00:03

Re: Tax return question
 
TLDR, but JON & MARIA should get married.

aSwissInTheUS 06.12.2018 01:25

Re: Tax return question
 
Quote:

Originally Posted by FedeM (Post 3020398)
PS: what's about the extra bill because of ZH? Sounds new to JON.

Switzerland is a very federalist country. There is a federal, cantonal, and a communal tax. The communal tax can vary quite a bit inside one canton. Zurich has a tax rate which is above the cantonal average.

On the other hand the tax at source is the same for any commune in the canton. It should be an average of all communes. Tax at source also includes flat rate deductions. A big deduction are the travel expenses to work. If you work in the same commune your actual travel expenses (12 time a 2 zone monthly pass) is much lower than the assumed expenses.


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