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Old 13.12.2018, 10:36
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Recalculating - Neuveranlagung Quellensteur ZH

Hello!

So I just got back our Neuveranlagung Quellensteuer from 2016. We pay quellensteuer and are below the 120k, but my wife is partially self employed, so we are obliged to do a Tax declaration. Based on that I calculated the taxes we would owe if we were residents / permit C holders, and compared that to the Quellensteuer we had to pay: The amount of quellensteuer, after reductions of 3e Säule and Childcare, was more than 50% higher than the normal tax.

Main reason for that is that I make about 2/3 of our income and my wife the other 1/3. From a tax point of view it would be better if each made 1/2 of the income.

I am now talking to a person at the quellensteuer and he pointed me to the Regulation for Quellensteuer, available in German only (I think). I found the text below and would like your opinion about it. I am not a legal translator, but can make a "free translation" so everyone can follow the thread.

Der Steuerabzug für die in rechtlich und tatsächlich ungetrennter
Ehe lebenden Ehegatten, die beide erwerbstätig sind, richtet sich nach
Tarifen, die ihrem Gesamteinkommen Rechnung tragen und die alle
Pauschalen und Abzüge nach Abs. 1 sowie den Abzug bei Erwerbstätigkeit
beider Ehegatten berücksichtigen.

My translation:
The tax discount for couples were both are working is based on tarifs that regard their total income, and regard the Lump Sump and deductions from 1 (these are lump sums for work and child), as well as the discount for both working (this is the discount under nr 17, 5900 for Staatsteuer and 13400 for Bundessteuer).

So, how do you interpret the text above, specifically the part "richtet sich nach Tarifen, die ihrem Gesamteinkommen Rechnung tragen" or, in English, "is based on tarifs that regard their total income"? One (wishfull) interpretation is that they add both our incomes and divide that by 2, to have an average income to calculate the respective quellensteuer.

Question is however how that is to be applied: surely can't be done by our employers exchanging salary data to know the total income of family de Best

Many thanks for reading and your ideas!
Erik
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Old 13.12.2018, 11:57
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Re: Recalculating - Neuveranlagung Quellensteur ZH

This just means the tariffs in C are higher because there is a second income. Unfortunately the tax at source is indeed calculated per person which makes it worse than normal taxation if the division of income is not 50:50.
One exception is if one of a married couple works in ‘Nebenerwerb’, less than 15 hrs/wk and earning less than 2K/month. In this case they can be taxed according to D (10% flat rate) and the other at B which is lower than C. You have to apply for this B/D devision though.
The ‘Ergaenzende Veranlagung Quellensteuer’ seems to apply in your situation: https://www.steueramt.zh.ch/internet...zstb-93-1.html
Point 22/23 mention some deductions could be made on the income from self-employment of your wife, but maybe not if she also has a main income that has been taxed at source (to which these deductions are already applied in the calculation of the tax rate).
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Old 13.12.2018, 12:38
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Re: Recalculating - Neuveranlagung Quellensteur ZH

Hi mgosia,

Many thanks for your explanation, it makes sense indeed. I am going to find peace with the money "lost" and be thankful for all the other benefits we get from living in Zürich!

Best regards,
Erik
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Old 13.12.2018, 13:23
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Re: Recalculating - Neuveranlagung Quellensteur ZH

I understand your pain, hopefully it will last not longer than 5 years until you should get your C (if I correctly interpret the origin of your name ). Then you can still be annoyed you are taxed higher than a non-married couple!
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Old 13.12.2018, 14:43
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Re: Recalculating - Neuveranlagung Quellensteur ZH

We (Dutch and German) indeed applied for a C permit last month - so it is only the pain for 2017 and 2018 we have to process I will probably indeed find something to complain once we get in the "normal" system.
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Old 13.12.2018, 14:48
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Re: Recalculating - Neuveranlagung Quellensteur ZH

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We (Dutch and German) indeed applied for a C permit last month - so it is only the pain for 2017 and 2018 we have to process I will probably indeed find something to complain once we get in the "normal" system.
Definitely if you live in Zürich city (high tax rate).

Good luck with the permit application, should be an easy one with your nationalities.
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Old 13.12.2018, 15:52
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Re: Recalculating - Neuveranlagung Quellensteur ZH

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Definitely if you live in Zürich city (high tax rate).

Good luck with the permit application, should be an easy one with your nationalities.
That is what I always read/heard. But I did the tax declaration and based on that our due taxes would be about 60% of what we paid in Quellensteur. Reason, as mentioned by mgosia as well, is that our income is not 50:50, and will probably never be that either. So, for the moment I am looking toward paying "normal" taxes instead of tax at source

About a week ago we handled in the required documentation (working contracts, declaration we were not on social benefit, and those declarations that we have no known debts). The lady said the procedure could take a while...
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Old 13.12.2018, 16:21
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Re: Recalculating - Neuveranlagung Quellensteur ZH

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That is what I always read/heard. But I did the tax declaration and based on that our due taxes would be about 60% of what we paid in Quellensteur
That sounds not right. I was in your situation with income split 2/5 and 3/5 and our taxes after C got lower but maybe 10% or so... are you sure you calculated all of Staats & Gemeinde & Bundessteuern?
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Old 13.12.2018, 16:41
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Re: Recalculating - Neuveranlagung Quellensteur ZH

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We (Dutch and German) indeed applied for a C permit last month - so it is only the pain for 2017 and 2018 we have to process I will probably indeed find something to complain once we get in the "normal" system.
It doesn't makes sense. I still pay Quellensteur as a permit B holder but I was always obliged to submit the full tax declaration which does not differ from a Swiss citezen or C permit holder. I am sure that if for any case the Quellensteur was higher than my tax declaration I would receive a tax return.
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Old 13.12.2018, 16:44
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Re: Recalculating - Neuveranlagung Quellensteur ZH

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That sounds not right. I was in your situation with income split 2/5 and 3/5 and our taxes after C got lower but maybe 10% or so... are you sure you calculated all of Staats & Gemeinde & Bundessteuern?
Well, we do a lot of deductions (married, 3 kids, paying into 2nd and 3rd pillar), so our taxable income was about 42000. If I put that in the calculator
https://www.steueramt.zh.ch/internet...desteuern.html I get about 2400 due taxes. We, after the "neuveranlagung", will be paying close to 4000 (2400 is about 60% of 4000).

I also put the same value in the Bundessteuer calculator, and the calculated Steuerbetrag is 0. So I think I did the calculations in the right way!?
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Old 13.12.2018, 16:50
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Re: Recalculating - Neuveranlagung Quellensteur ZH

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It doesn't makes sense. I still pay Quellensteur as a permit B holder but I was always obliged to submit the full tax declaration which does not differ from a Swiss citezen or C permit holder. I am sure that if for any case the Quellensteur was higher than my tax declaration I would receive a tax return.
Are you married? We are talking about taxation of married couples. Your situation only applies in the case if one of the couple earns over 120K. Then 'nachträgliche ordentliche Veranlagung' is applied which is normal taxation. In all other cases there is taxation at source. This can be higher for a married couple if one earns much less than the other because of the progressive tax rates.
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Old 13.12.2018, 16:55
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Re: Recalculating - Neuveranlagung Quellensteur ZH

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It doesn't makes sense. I still pay Quellensteur as a permit B holder but I was always obliged to submit the full tax declaration which does not differ from a Swiss citezen or C permit holder. I am sure that if for any case the Quellensteur was higher than my tax declaration I would receive a tax return.
Hi!

That is our case is well, we are obliged due to a (rather small) freelance income from my wife. The tax declaration goes to the tax office, they see that the freelance income is very low that taxes do not apply, and because we have so much deductions (2nd and 3rd Pillar, childcare), formally called Abzugsüberhang, they forward the whole package to the Quellensteuer. These will take the deductions, divide it equally over the 12 months of the year, calculate the new (lower) salary and from that calculate the due tax at source. The difference between the already paid taxes and the due taxes is than returned to us.

So in 2016 we had a taxable income of 42000 and we paid about 7000 in tax at source. After they recalculated the tax at source, we have to pay about 4000, so we are getting 3000 back. Still, the 4000 is much higher than the 2400 due under normal taxation. At least, if I calculated these 2400 in the right way!
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Old 13.12.2018, 17:23
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Re: Recalculating - Neuveranlagung Quellensteur ZH

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Well, we do a lot of deductions (married, 3 kids, paying into 2nd and 3rd pillar), so our taxable income was about 42000. If I put that in the calculator
https://www.steueramt.zh.ch/internet...desteuern.html I get about 2400 due taxes. We, after the "neuveranlagung", will be paying close to 4000 (2400 is about 60% of 4000).

I also put the same value in the Bundessteuer calculator, and the calculated Steuerbetrag is 0. So I think I did the calculations in the right way!?
Sounds good Still it does not make sense. In tariff C3 (for 3 kids) you would pay around 300 CHF quellensteuer per month (the 4K for the year you mentioned you have to pay) on a 2:1 split income of 7.5:3.75K per month. How you could get from 120K/yr to 42K taxable (without being able to deduce kids, 3a/b and childcare again as that is already in the 120K) is a bit of a mystery to me (maybe it is you who needs to give me tips )

Last edited by mgosia; 13.12.2018 at 17:42.
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Old 13.12.2018, 18:18
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Re: Recalculating - Neuveranlagung Quellensteur ZH

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So in 2016 we had a taxable income of 42000 and we paid about 7000 in tax at source. After they recalculated the tax at source, we have to pay about 4000, so we are getting 3000 back. Still, the 4000 is much higher than the 2400 due under normal taxation. At least, if I calculated these 2400 in the right way!
Bah, I'm single. I cannot get how you get only 2.4k tax due instead of 4k as you say. In my case the tax at source is just higher than what I get from the normal taxation giving the same data as the tax at source which perhaps assume I'm living in the most expensive commune in my canton (???).
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Old 13.12.2018, 19:29
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Re: Recalculating - Neuveranlagung Quellensteur ZH

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Sounds good Still it does not make sense. In tariff C3 (for 3 kids) you would pay around 300 CHF quellensteuer per month (the 4K for the year you mentioned you have to pay) on a 2:1 split income of 7.5:3.75K per month. How you could get from 120K/yr to 42K taxable (without being able to deduce kids, 3a/b and childcare again as that is already in the 120K) is a bit of a mystery to me (maybe it is you who needs to give me tips )
You did the math quite well! Indeed, 126k income and 83k deductions, for 43k taxable. The deductions on the normal tax declaration include work, pension, childcare, 9000*3 Kid lump sum... So, you agree that if I would be in standard taxation, I would have to pay about 2400?

Some of these deductions are already taken into account in Source at Tax (lump sum for 3 kids, work, health insurance), so only the childcare and pension money (about 27k) was considered in the source tax recalculation.

So, to add some further data: our gross income (on which source at tax is calculated) was 142k. The valid discounts (childcare, pension schemes) were 27k, so there remains 115k to tax. If we wpuld divide this equally over me and my wife, and equally over 12 months, we get a monthly salary of ~4800 each (115k / 24). For this salary the tax rate is 1.99%, or 95. Multiply this by 24, one gets 2280, which is close to the 2400 I calculated earlier. So, indeed, if loan is split 50:50 and over 12 equal monthly values, the tax at source is somewhat lower than normal taxation. But due to unequal monthly pays (bonus, etc) and and unequal split, our source tax got at almost 4000.

I presented them with the above calculation, but unfortunately they were not willing to apply it. I may, however, complain - but if that changes anything?

One thing I am considering, after playing with excel, is to ask for a redistribution of the deductions so that they all go on my income - initial calculation brings the due quellensteuer to about 3250.
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Old 13.12.2018, 19:31
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Re: Recalculating - Neuveranlagung Quellensteur ZH

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Bah, I'm single. I cannot get how you get only 2.4k tax due instead of 4k as you say. In my case the tax at source is just higher than what I get from the normal taxation giving the same data as the tax at source which perhaps assume I'm living in the most expensive commune in my canton (???).
I just replied with some more information, I hope this makes my situation a bit clearer?
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Old 13.12.2018, 22:21
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Re: Recalculating - Neuveranlagung Quellensteur ZH

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You did the math quite well! Indeed, 126k income and 83k deductions, for 43k taxable. The deductions on the normal tax declaration include work, pension, childcare, 9000*3 Kid lump sum... So, you agree that if I would be in standard taxation, I would have to pay about 2400?
Thanks, tax stuff is my secret procrastination weapon Still seems like a lot of deductions. You know only 10K/yr is accepted at the moment for childcare no matter the number of kids? Ridiculous I know. Did you pay extra into 2nd pillar? Anyway, they will not split 50:50 and will calculate the quellensteuer per month per person because that is what they do even if it is unfair for part of the population.
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Old 14.12.2018, 12:08
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Re: Recalculating - Neuveranlagung Quellensteur ZH

I indeed paid into 2nd pillar, as I really should start considering my pension Yesterday our C permits arrived, so, as said earlier, two more years to "groan", and afterwards other issues

Wish you a nice weekend!
Erik
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Old 14.12.2018, 13:10
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Re: Recalculating - Neuveranlagung Quellensteur ZH

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You know only 10K/yr is accepted at the moment for childcare no matter the number of kids? Ridiculous I know.
As ridiculous as wrong. It is CHF 10'100 per child. See page 22 https://www.steueramt.zh.ch/internet...017_HA+DEF.pdf
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Old 14.12.2018, 13:22
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Re: Recalculating - Neuveranlagung Quellensteur ZH

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yesterday our C permits arrived, so, as said earlier, two more years to "groan", and afterwards other issues
You want to go for the Swiss pass? You know that you will forfeit the Dutch one?

Congrats by the way :-)
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