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Old 11.03.2019, 16:07
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Double taxation - live in CH & work abroad (home office)

Hi all,

Would appreciate some help on the following scenario, namely around taxation in CH.

Family status:
- We are a family of 3 (married couple + 1 kid) and we all live in Zurich. We all have B Permit.

Work status (husband):
- have full-time job in Zurich and "no tax relation" with my home country.

Work status (wife):
- currently not working in Switzerland.
- has a job offer in our home country (Portugal), and will be working from home in Zurich 99% time (might need to travel once a month).
- taxes will have to be paid in Portugal as the working contract is there and will need to be tax registered in Portugal as the company is located there



Questions:

- What (further) taxes are due in Switzerland? Double taxation agreement explicitly mention that taxation is due in the country where the company/work is located.

- Does the taxes get declared as well in Switzerland and then a certification from Portuguese paid taxes is issued and / deducted?

- Where / what / how to fill in "whatever is needed" in the swiss tax declaration?

- Would this count in Switzerland as "being employed"? eg1. could she still register in RAV for getting help on finding a job in Switzerland? eg2. Could I deduct in the swiss tax declaration the costs with a Kita?

- any links from forums, sites, etc covering this kind situation

- anyone knows a competent tax accountant which could advise



I believe nowadays these type of live/job setup are common. Does anyone have experience in similar situations?

Tks
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Old 11.03.2019, 16:33
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Re: Double taxation - live in CH & work abroad (home office)

She resides here and she works here: She will be taxed here. Art. 15 of the treaty.
Or do I read it wrong?

Last edited by aSwissInTheUS; 11.03.2019 at 16:49.
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Old 11.03.2019, 16:59
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Re: Double taxation - live in CH & work abroad (home office)

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She resides here and she works here: She will be taxed here. Art. 15 of the treaty.
Or do I read it wrong?
Tks for the feedback.

The job is there (Portugal) and she is alowed to work from home (in Zurich). Taxes need to be paid there (that is clear for me). Which treaty and which article 15 you refer to? (Portugal-Switzerland agreement?)

Question is: if a declaration in CH is needed? And what are the impacts?
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Old 11.03.2019, 17:12
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Re: Double taxation - live in CH & work abroad (home office)

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Tks for the feedback.

The job is there (Portugal) and she is alowed to work from home (in Zurich). Taxes need to be paid there (that is clear for me). Which treaty and which article 15 you refer to? (Portugal-Switzerland agreement?)

Question is: if a declaration in CH is needed? And what are the impacts?
Yes, you have to declare both your incomes. Just download the tax software and type in the data and have it calculated.
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Old 11.03.2019, 17:26
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Re: Double taxation - live in CH & work abroad (home office)

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Yes, you have to declare both your incomes. Just download the tax software and type in the data and have it calculated.
Tks but that calculation does not take into account double taxation agreements, right? That would mean the income from abroad is taxed twice.

And what to declare: income before taxes abroad? Income after taxes abroad? Where does taxes paid abroad are referenced?
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Old 11.03.2019, 17:26
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Re: Double taxation - live in CH & work abroad (home office)

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The job is there (Portugal) and she is alowed to work from home (in Zurich).
AFAIK it maters where the job is actually performed. If she is not there the job is here. Also an issue for cross border commuters and home office days. Too many home office days and you become tax problems.
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Old 11.03.2019, 17:30
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Re: Double taxation - live in CH & work abroad (home office)

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And what to declare: income before taxes abroad? Income after taxes abroad? Where does taxes paid abroad are referenced?
You will have to do a "Internationale Steuerausscheidung"
https://www.stadt-zuerich.ch/fd/de/i...scheidung.html

After that it it will be clear what contributes to the tax rate, what is taxable, and what tax has already paid and is accounted for.
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Old 11.03.2019, 17:34
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Re: Double taxation - live in CH & work abroad (home office)

I worked several years for companies in Britain while based here - maybe going there on a visit once a year. There was never any question of tax liability arising in the UK.

I also know people who worked for Swiss companies in Canada, Ireland and Britain. Again - they paid no Swiss tax. There was no Swiss tax liability.

If you search this site, you'll find quite a number of people asking how to work as an employee of a non-Swiss based company. Effectively, they get paid their salary gross + the employer's contribution. They then pay their tax and social contributions (including the employer's contribution) directly.

So it seems a bit strange that you think your wife must pay tax in Portugal. Maybe Portuguese tax law is different from the rest of Europe, but I strongly suggest you ask a Portuguese tax lawyer for guidance.
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Old 11.03.2019, 17:40
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Re: Double taxation - live in CH & work abroad (home office)

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Hi all,

Would appreciate some help on the following scenario, namely around taxation in CH.

Family status:
- We are a family of 3 (married couple + 1 kid) and we all live in Zurich. We all have B Permit.

Work status (husband):
- have full-time job in Zurich and "no tax relation" with my home country.

Work status (wife):
- currently not working in Switzerland.
- has a job offer in our home country (Portugal), and will be working from home in Zurich 99% time (might need to travel once a month).
- taxes will have to be paid in Portugal as the working contract is there and will need to be tax registered in Portugal as the company is located there



Questions:

- What (further) taxes are due in Switzerland? Double taxation agreement explicitly mention that taxation is due in the country where the company/work is located.

- Does the taxes get declared as well in Switzerland and then a certification from Portuguese paid taxes is issued and / deducted?

- Where / what / how to fill in "whatever is needed" in the swiss tax declaration?

- Would this count in Switzerland as "being employed"? eg1. could she still register in RAV for getting help on finding a job in Switzerland? eg2. Could I deduct in the swiss tax declaration the costs with a Kita?

- any links from forums, sites, etc covering this kind situation

- anyone knows a competent tax accountant which could advise



I believe nowadays these type of live/job setup are common. Does anyone have experience in similar situations?

Tks
All your earnings and assets in CH and abroad have to be declared in the tax return
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Old 11.03.2019, 17:58
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Re: Double taxation - live in CH & work abroad (home office)

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Which treaty and which article 15 you refer to? (Portugal-Switzerland agreement?)
Sure. What else would be applicable?
German, French, Italian version here:
https://www.admin.ch/opc/de/classifi...221/index.html
Portuguese version somewhere on the Portuguese government website.
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Old 12.03.2019, 01:22
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Re: Double taxation - live in CH & work abroad (home office)

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Sure. What else would be applicable?
German, French, Italian version here:
https://www.admin.ch/opc/de/classifi...221/index.html
Portuguese version somewhere on the Portuguese government website.
Thanks. This is exactly it! And line 2 of the article indicates that for our case the taxes are due to Portugal. Though, article 23 stated that will still have to declare in Swiss for final rate adjustment (although amount abroad is exempt).

Just need now to findout which (if any) documentation is required from Portugal to show to Swiss authorities that the due tax in Portugal has been paid (?)
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Old 12.03.2019, 01:26
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Re: Double taxation - live in CH & work abroad (home office)

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I worked several years for companies in Britain while based here - maybe going there on a visit once a year. There was never any question of tax liability arising in the UK.

I also know people who worked for Swiss companies in Canada, Ireland and Britain. Again - they paid no Swiss tax. There was no Swiss tax liability.

If you search this site, you'll find quite a number of people asking how to work as an employee of a non-Swiss based company. Effectively, they get paid their salary gross + the employer's contribution. They then pay their tax and social contributions (including the employer's contribution) directly.

So it seems a bit strange that you think your wife must pay tax in Portugal. Maybe Portuguese tax law is different from the rest of Europe, but I strongly suggest you ask a Portuguese tax lawyer for guidance.
Seems like that is the agreement. Just went through it and taxes are due in Portugal (exempt in Switzerland)... which is a disadvantage

I don't think the law is much different from the rest of EU. Just the conditions are very specific (in this case a perm contract from a local company in PT). But still, the use case is covered in the double taxation agreement.
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Old 12.03.2019, 01:36
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Re: Double taxation - live in CH & work abroad (home office)

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You will have to do a "Internationale Steuerausscheidung"
https://www.stadt-zuerich.ch/fd/de/i...scheidung.html

After that it it will be clear what contributes to the tax rate, what is taxable, and what tax has already paid and is accounted for.
I have done this form for owned properties abroad... not sure where to declare a "salary" received abroad... I guess I'll "play" a bit with the tax declaration and/or call the Steueramt for clarification.
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Old 12.03.2019, 01:37
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Re: Double taxation - live in CH & work abroad (home office)

Thanks all for the contributions. From a tax declaration perspective this is widely clarified.

Further questions now are:
- will my wife be considered as a "working person"? - tax rate is double incomers
- will I be able to deduct (example) Kita costs?
- what about social security obligations in Switzerland?

any ideas?
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Old 12.03.2019, 21:02
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Re: Double taxation - live in CH & work abroad (home office)

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Seems like that is the agreement. Just went through it and taxes are due in Portugal (exempt in Switzerland)... which is a disadvantage

I don't think the law is much different from the rest of EU. Just the conditions are very specific (in this case a perm contract from a local company in PT). But still, the use case is covered in the double taxation agreement.
Your problem is that it's the permanent contract. I couldn't recommend more to talk to the company directly offering a business-to-business cooperation. It's very simple for the employer but it happens often that when people are looking for employee they only think about the 'employee'. If the company already accepted your wife for the job, working remotely, it's only a matter of clarification ;-) However then here in Switzerland she can be independent with no RAV or she can create a Gmbh and employ herself.
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Old 12.03.2019, 21:53
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Re: Double taxation - live in CH & work abroad (home office)

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Your problem is that it's the permanent contract. I couldn't recommend more to talk to the company directly offering a business-to-business cooperation. It's very simple for the employer but it happens often that when people are looking for employee they only think about the 'employee'. If the company already accepted your wife for the job, working remotely, it's only a matter of clarification ;-) However then here in Switzerland she can be independent with no RAV or she can create a Gmbh and employ herself.
Tks for feedback. Yes, and that was exactly the best plan we thought... Not to say that taxes and Social Security in Portugal are 5x more expensive than here.

The story is a bit longer: my wife got a sabatical from the company before coming to Switzerland, and now is restarting the same job... so this is her previous perm job she had there (but can now do it from here).

As a (re)start point, she will keep same conditions. Maybe she can change the relation to B2B later.
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Old 12.03.2019, 22:52
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Re: Double taxation - live in CH & work abroad (home office)

Yeah, try to explain that to someone outside of Switzerland:-( Been there, done that....

Would appreciate to get input on further arguments why employment contract is a bad idea. Apart from being an admin nightmare...


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Your problem is that it's the permanent contract. I couldn't recommend more to talk to the company directly offering a business-to-business cooperation. It's very simple for the employer but it happens often that when people are looking for employee they only think about the 'employee'. If the company already accepted your wife for the job, working remotely, it's only a matter of clarification ;-) However then here in Switzerland she can be independent with no RAV or she can create a Gmbh and employ herself.
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Old 13.03.2019, 00:19
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Re: Double taxation - live in CH & work abroad (home office)

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Thanks all for the contributions. From a tax declaration perspective this is widely clarified.

Further questions now are:
- will my wife be considered as a "working person"? - tax rate is double incomers
- will I be able to deduct (example) Kita costs?
- what about social security obligations in Switzerland?

any ideas?
So, does anyone know where exatly in the tax declatation this income is registered?

Does anyone with a similar experience know what the tax authority asks as a prove of salary? and prove of taxes paid in other country? (i would assume it is the tax declaration from the other country... but happy to hear feedabck)

Tks all
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Old 13.03.2019, 00:43
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Re: Double taxation - live in CH & work abroad (home office)

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Yeah, try to explain that to someone outside of Switzerland:-( Been there, done that....

Would appreciate to get input on further arguments why employment contract is a bad idea. Apart from being an admin nightmare...
Not sure if I understand ;-) Here, the employment contract from Portugal seems unfavourable for the OPs wife, higher taxes. One should also consider where it is better to pay the other contributions, such as retirement. For example when you work in Spain you have an obligatory health insurance, which means that perhaps you could cancel your Swiss health insurance if you'd like to.
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