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Old 30.12.2006, 17:07
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B Permit Holder in Zürich - Worth Filing a Tax Return?

I'm a B permit holder living and working in Zürich who earns CHF 135,000 per annum. I'm confused over whether I should have to do a tax return as I earn over CHF 120,000 or is it only for holders of a C permit? I have read on the forum that I can request to do a tax return, but is it worth it?

In terms of additional deductions I could make, the only thing that came to mind was the intensive German language course I did in Germany, but is education an allowable tax deductable?

The language course didn't quite prepare me to read Zürich's tax website.

Thanks
hbunny
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Old 30.12.2006, 18:17
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Re: B Permit Holder in Zürich - Worth Filing a Tax Return?

I'm mystified - if you have a B and are correctly registered with the Einwohneramt where you are living, you can be sure you'll get a tax return to fill in, and won't have a choice! Or are you one of those who has the strange "source tax"?

RS
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Old 30.12.2006, 19:02
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Re: B Permit Holder in Zürich - Worth Filing a Tax Return?

Quote:
I'm a B permit holder living and working in Zürich who earns CHF 135,000 per annum. I'm confused over whether I should have to do a tax return as I earn over CHF 120,000 or is it only for holders of a C permit? I have read on the forum that I can request to do a tax return, but is it worth it?

In terms of additional deductions I could make, the only thing that came to mind was the intensive German language course I did in Germany, but is education an allowable tax deductable?

The language course didn't quite prepare me to read Zürich's tax website.

Thanks
hbunny
As someone earning over 120K you will have no option but to fill one in. If you have doubts it is worth getting a "treuhand" to do it in the first year. Cost for this is circa 300 Francs...
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Old 30.12.2006, 20:41
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Re: B Permit Holder in Zürich - Worth Filing a Tax Return?

As Richard said, if you are over the 120 limit you have no choice and should have a tax return sent to you for completion.

Education is deductable but it has to meet certain requirements, for instance a Masters degree is often not deductable as only a first degree is allowed a tax accountant is the best way forward.

If I were you I would be happy that you have the ability to fill in a form, normally when paying at source you will pay too much and thus be entitled to a refund
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Old 30.12.2006, 23:21
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Re: B Permit Holder in Zürich - Worth Filing a Tax Return?

I pay tax at source and was told by the agency that I wouldn't be doing a seperate tax return. Or maybe I misunderstood and I'll be taxed at source and still have to do a tax return.

I suppose all will become clear shortly. When are tax returns sent out and when are they due in Zürich?

Thanks
hbunny
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Old 30.12.2006, 23:23
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Re: B Permit Holder in Zürich - Worth Filing a Tax Return?

I pay tax at source and was told by the agency that placed me that I wouldn't be doing a seperate tax return. Or maybe I misunderstood and I'll be taxed at source and still have to do a tax return.

I suppose all will become clear shortly. When are tax returns sent out and when are they due in Zürich?

Thanks
hbunny
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  #7  
Old 31.12.2006, 00:14
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Re: B Permit Holder in Zürich - Worth Filing a Tax Return?

Ah - the dreaded "Quellensteuer". My understanding of this is that it's a scheme like PAYE in the UK, which deducts tax as you eran, so there's no chance of you skipping the country and not settling your income tax bill. What I've never understood is why some "B" permit holders have to suffer this whilst others (me, for example) go straight into the normal Swiss system and can fill in a tax return. I can understand it for "L" permit holders but not "B"s.

Since I've never been subject to Quellensteuer I'm no expert but I have the impression you have no opportunity to deduct the legitimate things all Swiss can deduct, like travel to work costs, education etc., and therefore pay far more tax than you should.

Given the sums involved I'd find a tax advisor and ask them to help you. I can't see a good reason why you should not be allowed to file a tax return, but sometimes have the suspicion it's easier or safer for the agencies! I always use a tax adviser to help me do my tax return and rarely spend more than SFR 500.-- each year. That seems a small investment for not paying too much tax and ensuring your social security contributions are correctly paid and credited.

RS
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Old 31.12.2006, 08:26
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Re: B Permit Holder in Zürich - Worth Filing a Tax Return?

Quote:
Ah - the dreaded "Quellensteuer". My understanding of this is that it's a scheme like PAYE in the UK, which deducts tax as you eran, so there's no chance of you skipping the country and not settling your income tax bill. What I've never understood is why some "B" permit holders have to suffer this whilst others (me, for example) go straight into the normal Swiss system and can fill in a tax return. I can understand it for "L" permit holders but not "B"s.
If you are married to a Swiss national, then you have to pay as per the Swiss. I'm not, I pay Quellensteuer.

Quote:
Since I've never been subject to Quellensteuer I'm no expert but I have the impression you have no opportunity to deduct the legitimate things all Swiss can deduct, like travel to work costs, education etc., and therefore pay far more tax than you should.
You can't claim all the deductions.
Earn less than 120k you can fill in soem kind of "light" return to claim Pillar 3a etc

Quote:
Given the sums involved I'd find a tax advisor and ask them to help you. I can't see a good reason why you should not be allowed to file a tax return, but sometimes have the suspicion it's easier or safer for the agencies! I always use a tax adviser to help me do my tax return and rarely spend more than SFR 500.-- each year. That seems a small investment for not paying too much tax and ensuring your social security contributions are correctly paid and credited.

RS
Just search "treuhand" or "accountant" (top right).
I paid CHF 162 for my tax return last year.

Most agencies don't really care. Knowing some pimps frequent the site, some are worse than others...
I can give you several examples of people being shafted over tax, pension, SVA etc.
Concrete example, happened to 2 contractors I know: *Insert agency name here* always deducts the same % of tax regardless of gross (eg same for both 15 days and 20 days work). Now, what is declared to the tax office...?
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Old 31.12.2006, 10:50
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Re: B Permit Holder in Zürich - Worth Filing a Tax Return?

I usually have to pay about 500 for assistance with my tax return since my tax position is probably rather more complex than usual and there's more work involved. I too have heard stories of dodgy agents but so far I seem to have been lucky and have not as far as I know been bitten. I'd love to contribute to a privately held list of known good and bad agents, which we couldn't openly publish here, but might be able to maintain and distribute privately. I volunteer to keep that list if people wish to PM me privately with good/bad experiences and things to watch out for.

One of the all-time best agencies I've found is Elan IT. I am always delighted when I gain a project through them as somehow I always seem to have more money each month in my account than with other agents, for similar daily or hourly gross rates.

For people who are new to this, I'm happy to explain my situation. I work as a contractor in IT, have (now) a "C" permit (I started with a "B") and am married to a Swiss lady. Please note the following is only my experience and what I have found out - your mileage may vary.

There are basically 4 ways one can work in Switzerland.

(1) You can be an employee. here the situation is much like the UK, you get a gross salary each month from your employer. From this deductions for various insurances are made that are broadly equivalent to English NI and cover unemployment and basic sickness and accident insurance. There's also deductions towards your pension, this deduction is usually matched by your employer. You fill in a tax return each year and get tax bills retrospectively. There's no PAYE or "Quellensteuer" (Tax at source) to pay here.

(2) You can have your own company and be an employee of that company (see (1) above). Then lots of things are tax-deductable and theoretically you get to keep more of the loot, but I found the bookkeeping costs and paperwork aggro very high and liquidated my company. Others seem to have more success. A big disadvantage is you can't claim unemployment benefit if you're a company director and are between contracts.

(3) You can be truly self-employed. This would be best of all as the possibilities for deductions are great and paperwork minimum, but in the IT branch at least, you'll come up against not the tax authorities, but the AHV people. These folks are broadly equivalent to the British DHSS and are responsible for old-age insurance etc. They forbid IT people from self-employment with the argument that unlike say, a freelance painter, we have maybe only one customer each year and the customer provides all our "tools" so in reality we have a short-term employment. Their main objection is that self-employed persons don't have to pay the employers contributions because there's no employer, so the DHSS lose out.

Which leaves us (4) and that's what most "B" and "C" IT people work with. Here, you find a contract through an agent. There's an agreed hourly or daily rate which is gross. You enter into a short-term employment contract with the agent, with a stated termination date, which can however be extended by mutual agreement. From the gross rate the agent will expect the contractor to pay both the deductions of the employee and the contributions the employer would normally have to make. The AHV people get their cut and everyone's happy.

I've probably had 8 or so contracts on this basis in the last 7 years. The thing that has surprised me is the variation in how all the deductions are calculated to arrive at the net amount you get each month. These variations seem due to (a) which Canton the agent's office is in as the various deductions vary slightly on a Cantonal basis and (b) the agent's interpretation of the rules. I now always ask any new agent to prepare me an example payslip for says, the month I have just worked then I can compare that with the "real" one I received from the previous agent and see any vast differences. I also ask if they have an Excel spreadsheet that I can have so I can investigate how their calculations are done. I have a few of these spreadsheets now and would be pleased to give copies so people can plug in their rates and see where the money goes!

Another vital point are the deductions (employers part and employees part) that your pimp makes for your Swiss pension. These are mandatory and the sums involved are quite large, typically 20% of your gross depending on your age. Up until recently you could get all these back if you left Switzerland permanently or started a business but I believe that has just changed. Anyway, it's really important to check that the totals of the deductions do actually wind up in your pension account. It's never happened to me but I imagine the temptation for a dodgy agent to "lose" that money must be great. Each agent has their own Pension company, and as you move from agent to agent the whole amount of your accumulated pension should move with you. I've sometimes had problems unlocking those funds and having them moved and am currently looking for 50K that has "stuck" with the pension company of a former agent. I'm sure it's just paperwork, but I'm keepng a very close eye on things.

RS
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Old 31.12.2006, 12:05
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Re: B Permit Holder in Zürich - Worth Filing a Tax Return?

For estimates:
http://www.accurity.com/tools/overview.htm, click "revenue estimate"

A good rule of thumb for newbies to contracts in Switzerland.

Options 2 and 3 have the disadvantage that you may have to "prove" you are a real company to the authorities.
It *could* backfire, that said I know several guys running through GmbH (Limited company) or "self-employed".

If you go for option 4, the easiest, a good pension scheme works wonders.
Not all agencies do this - you know who you are...
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Old 31.12.2006, 13:42
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Re: B Permit Holder in Zürich - Worth Filing a Tax Return?

Does anyone know mroe about this 'light' return? I am well under the 120k, but have taken a bunch of german courses over the year that could bump me down by quite a bit.

Also Quellensteuer is calculated per month (hence the drag of a 13th month salary), I had a big raise for the last 3 months of 2006, so those months I am in a much higher tax bracket - I assume the returns are based on total annual income, so that might work out to a difference as well (a few 100Fr by my estimate).

So Anyone have a link for the light form - good time to practice what I lernt in those classes...

Andrew
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Old 31.12.2006, 14:26
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Re: B Permit Holder in Zürich - Worth Filing a Tax Return?

Sorry, my treuhand told me about it.
Perhaps here somewhere http://www.steueramt.zh.ch/html/formulare/index.htm (Zürich tax office, forms)
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Old 06.01.2007, 08:56
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Re: B Permit Holder in Zürich - Worth Filing a Tax Return?

Hi,
I am L Permit holder working in Geneva from an Indian IT company and came to Swiss in Oct 2005.

I am a bit confused and worried about the exact concept of TAX RETURNS in Swiss.

At the begining of 2005 I have received some 2-3 letters (all in French ) saying
1. Certificate of Salary.
2. Receipt of Impot (Tax)
3. Swiss Life Insurance letters

I am a bit confused on what is the exact process after receiving these letters. Are these letters like P60 (UK) or Form 16 (India) which we get in UK / India?

My Tax is deducted AT SOURCE from my monthly salary.

I have read some posts above it says that if earning is less that 120K in a year then you do not need to file tax return. My earning is 84 K, do I need to file a return.

Please help !!!
Thanks in advance.
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Old 12.01.2007, 21:45
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Re: B Permit Holder in Zürich - Worth Filing a Tax Return?

RS

Unless you have fallen through the net, or are a property owner or married a Swiss, as a B permit holder you must actually be subject to the "quellensteuer" regime even if the tax is not deducted at source. Your employer would have filled in a guarantee to pay your tax if you default on the payments.

On a day to day basis this has no real effect, but there are circumstances where it matters eg a change of canton during the year is taxed differently. I had a nasty surprise on this moving from NE to SZ a couple of years ago. Just a heads up.

Daniel
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Old 05.07.2007, 00:55
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Re: B Permit Holder in Zürich - Worth Filing a Tax Return?

RSargeant,

Did you end up putting that list of good/bad agents together? If so, I'd really like to get my hands on a copy of it as I'm currently in the process of trying to select an agent to use.

Any feedback people can provide as to which agents they would or wouldn't recommend to use would be very much appreciated.

Cheers,

Charday
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Old 10.11.2009, 15:58
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Re: B Permit Holder in Zürich - Worth Filing a Tax Return?

Good afternoon everyone. I am new to Zurich and I have been reading some of your comments regarding tax returns. I have chosen to have my taxes done by a professional but do not know who to turn to. Could someone please provide me with an indication on where to look for an accountant/tax specialist ?

Thanks, Yacine.
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Old 23.03.2018, 02:40
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I have a B Permit and I do not work in Switzerland. I have passive income from property rentals overseas (In Australia)
I am a bit confused about tax returns too. I presume I must declare all the income I get from my overseas rental properties and then I'll get taxed on that here in Switzerland right?

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I have a B Permit and I do not work in Switzerland. I have passive income from property rentals overseas (In Australia)
I am a bit confused about tax returns too. I presume I must declare all the income I get from my overseas rental properties and then I'll get taxed on that here in Switzerland right?
EDIT - but in Australia as a 'foreign resident' They will want me to pay 32% on my rental income too!?? Not sure who I am meant to pay tax to in this situation?

Last edited by 3Wishes; 23.03.2018 at 13:01. Reason: merging consecutive replies
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Old 23.03.2018, 07:41
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Re: B Permit Holder in Zürich - Worth Filing a Tax Return?

Check for any double taxation agreements there may be between Australia and Switzerland.
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Old 23.03.2018, 10:08
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Re: B Permit Holder in Zürich - Worth Filing a Tax Return?

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I have a B Permit and I do not work in Switzerland. I have passive income from property rentals overseas (In Australia)
I am a bit confused about tax returns too. I presume I must declare all the income I get from my overseas rental properties and then I'll get taxed on that here in Switzerland right?
You are not taxed on overseas property income or asset value in Switzerland.However, they are taken into consideration to work out the tax rates you pay which is based on your global income/assets. But if you have no Swiss taxable income zero x32% is still zero.

Source: Here 20 years with properties both in the UK and France.

Speak to your local tax office, and if your affairs are really as simple as you describe they might waive you filling out a return, and if they do want one it is not complicated anyway.
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Old 23.03.2018, 10:08
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Re: B Permit Holder in Zürich - Worth Filing a Tax Return?

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Check for any double taxation agreements there may be between Australia and Switzerland.
Not applicable as OP will not be taxed on overseas properties.
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