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View Poll Results: If she is working for foreign employer and gets salary via Paypal, then...
She does not have to file taxes if she has B permit. 0 0%
Only she must file taxes each year, in spite of her B permit. 0 0%
Both she and her husband must file joint tax return, in spite of their B permits. 3 75.00%
She has to file taxes, but should not do it because nobody knows what she receives via Paypal 1 25.00%
It's hard to tell. Ask tax advisor! 0 0%
Voters: 4. You may not vote on this poll

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  #1  
Old 09.05.2019, 22:57
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Taxation when working for foreign employer (salary via Paypal)

Hello everybody,


If I understand correctly, a person with B permit (Non-EU) who is working in Switzerland is under no obligation to file Swiss taxes, because taxes will be withheld at the source (by employer).


But what happens if that person with B permit works in Switzerland for foreign employer (for example as a company representative), and earnings are paid to her Paypal account?

Her foreign employer of course will not withhold any Swiss taxes.


So these are my questions:
1. Should that person pay Swiss taxes on such income?

2. If yes, how can she file taxes if B permit holders are exempt from filing Swiss taxes each year?
3. Married couples in Switzerland are taxed together (joint tax return). If this person is married, and if her husband also has B permit and should not file taxes (because all taxes are automatically withheld by his Swiss employer), then how can they file together a joint tax return?
















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  #2  
Old 09.05.2019, 23:29
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Re: Taxation when working for foreign employer (salary via Paypal)

As you are a resident, you'll be taxed on your world wide income.
And paying via paypal is ridiculous.
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Old 09.05.2019, 23:34
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Re: Taxation when working for foreign employer (salary via Paypal)

Thanks for your reply. So, if the taxes should be filed, then should she file taxes alone, or together with her husband (who is also B permit holder, and who did not filed Swiss taxes so far)?


And getting paid via Paypal was the only option offered by employer, unfortunately...



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Old 09.05.2019, 23:53
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Re: Taxation when working for foreign employer (salary via Paypal)

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But what happens if that person with B permit works in Switzerland for foreign employer (for example as a company representative), and earnings are paid to her Paypal account?
Just give the local tax agency a call or pay them a visit, they'll be more than happy to provide you with the proper forms. Wether you are paid cash, through paypall or to a Swiss bank account is irrelevant, income is income.
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Old 10.05.2019, 00:02
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Re: Taxation when working for foreign employer (salary via Paypal)

Thanks for your reply, Edwin.



Maybe it would be best to visit local tax agency. Unfortunately, last time I was there, I asked several employees but nobody spoke English language (although many foreigners live in this part of Switzerland).

If I go there again, it seems that I should hire a translator first...



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Old 10.05.2019, 05:20
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Re: Taxation when working for foreign employer (salary via Paypal)

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Maybe it would be best to visit local tax agency. Unfortunately, last time I was there, I asked several employees but nobody spoke English language (although many foreigners live in this part of Switzerland).

If I go there again, it seems that I should hire a translator first...
Not surprising as it is not one of the official languages of Switzerland. You can try and find a translator by checking "rent a rentner" or contact forum member Mulhollander.
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Old 10.05.2019, 09:18
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Re: Taxation when working for foreign employer (salary via Paypal)

First the OP will need to register for part time self employment & pay at least min 475 AVH. If total earnings in a year are only about 2k then this can be ignored.
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Old 10.05.2019, 10:26
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Re: Taxation when working for foreign employer (salary via Paypal)

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If I understand correctly, a person with B permit (Non-EU) who is working in Switzerland is under no obligation to file Swiss taxes, because taxes will be withheld at the source (by employer).
You don't understand correctly, which explains your other questions. A person on tax-at-source who earns under 120K (IIRC) usually does not have to file a tax return. However, they may want to and/or may be required to if they fulfill certain criteria - e.g. owning a house.

Quote:
So these are my questions:
1. Should that person pay Swiss taxes on such income?
Yes, tax is due on worldwide income

Quote:
2. If yes, how can she file taxes if B permit holders are exempt from filing Swiss taxes each year?
3. Married couples in Switzerland are taxed together (joint tax return). If this person is married, and if her husband also has B permit and should not file taxes (because all taxes are automatically withheld by his Swiss employer), then how can they file together a joint tax return?
Explain to the tax office that the couple have a significant source of other income and so need to file a tax return. Being on tax-at-source does not preclude filing your taxes. They may turn around and tell you not to bother, if the sums she earns are minor.

Note, if her income is high enough, she'll probably be due to pay employers and employees social contribution from her fee.

I am not a tax lawyer, things vary from canton to canton, and I've offered a simple explanation that does not cover every possible scenario. (It's a Friday, people like to nitpick).
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Old 10.05.2019, 10:47
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Re: Taxation when working for foreign employer (salary via Paypal)

It looks to me as though the employer isn't registered as a Swiss company. Are deductions for AHV, pension schemes, unemployment being taken on the salary? Are they able to deliver a Swiss salary certificate for tax purposes? If not it looks to me as though you're more closely to being self-employed and probably ought to be declared as such.
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Old 10.05.2019, 12:15
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Re: Taxation when working for foreign employer (salary via Paypal)

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It looks to me as though the employer isn't registered as a Swiss company. Are deductions for AHV, pension schemes, unemployment being taken on the salary? Are they able to deliver a Swiss salary certificate for tax purposes? If not it looks to me as though you're more closely to being self-employed and probably ought to be declared as such.
AFAIK self-employment usually requires at least three custormers to be accepted.

So OP may be in for a very expensive surprise as someone will probably have to pay the social security contributions.
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Old 10.05.2019, 13:08
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Re: Taxation when working for foreign employer (salary via Paypal)

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First the OP will need to register for part time self employment & pay at least min 475 AVH.
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AFAIK self-employment usually requires at least three custormers to be accepted.
I think Urs Max is right: she can not be self-employed in Switzerland. Here is the quote from the official Swiss SME portal (www.kmu.admin.ch): "What does being self-employed mean? In terms of social insurance, persons working for and on their own behalf, who are independent in their work and who assume the financial risk are self-employed. They decide on their organization, their method of working and outsourcing work to third parties. They work for more than one client."

She does not work on her on behalf (she works on behalf of foreign company), she is not independent (she depends on that company), she does not assumes financial risk, she does not decide on her organization, she does not choose method of working, she can not outsource her work, and she works only for one client.

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It looks to me as though the employer isn't registered as a Swiss company. Are deductions for AHV, pension schemes, unemployment being taken on the salary? Are they able to deliver a Swiss salary certificate for tax purposes? If not it looks to me as though you're more closely to being self-employed and probably ought to be declared as such.
Yes, the foreign company is not registered in Switzerland, and as far as I know no Swiss deductions are taken from the salary. Their position is - settling tax obligations in your country is your problem, we pay you agreed amount per hour, and you will have to figure out by yourself if you have to pay some taxes and how much.

I know that someone has to pay these Swiss deductions, so obviously in this case she will have to pay it.




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