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Old 13.09.2020, 19:25
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Working for an Italian Company from Zurich - taxes??

Hello everyone, hope you're doing well.
I would love you to answer to some info related to taxes/job contracts etc.

From Monday I've started remotely (as a freelancer) for an Italian Company. We actually don't have any contract as I'm trying to figure out which is the best thing to do because it's a pretty new thing for me.
My residence is in London but I actually live in Zurich.
I was thinking to start a business (Ltd) through an agency in the UK (also because it is the cheapest place where to do it) but in this case, how does it work for taxes? Should I pay them in the UK, Italy, or Switzerland?

If someone could help me would be great guys!
Thank you so much,
Laura
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Old 13.09.2020, 19:45
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Re: Working for an Italian Company from Zurich - taxes??

If you physically do the work in Switzerland, no matter where the client is (or even if the work is done only online), you will usually be deemed as working in Switzerland.

Do you have a permit to work here?

There are plenty of threads on the forum dealing with the complications of remote working.

If you use a UK Ltd company, there is a thing called anobag to do with swiss tax. It was so complicated to understand (for me), I closed my UK consultancy when I came here.

Good luck - but you should get some proper advice if you can.

Regards


Ian
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Old 13.09.2020, 20:45
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Re: Working for an Italian Company from Zurich - taxes??

Yeah, first point is do you have a residency permit that also allows you to work?

Not sure what you mean by residence in London since, if you live here, this is where you're resident as far as tax situation goes - that's what the Swiss will say anyway.
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Old 13.09.2020, 21:47
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Re: Working for an Italian Company from Zurich - taxes??

Hi Laura,

I agree with Medea.

There is a bilateral agreement between CH and IT, it says that "fiscal residence" is where one lives and conducts his business for more than 50% of the year.
When you say "I live in Zurich" the implication is that you must pay your taxes in CH, period.

Now, you also say "my residence is in London". Well, I am only familiar with the CH-IT agreements, but the 50% rule is kind of an international principle. Should it also apply to UK, it means that "reside in London" and "living in Zurich" may be incompatible statements from a legal and fiscal point of view.
It is also incompatible with Swiss immigration law, you can't "live in Zurich" without having your residency in Zurich, unless maybe for some corner cases.

I guess you should first clarify what your legal status officially is and if you look like a UK resident or a CH resident in front of the Italian law; depending on which one a different rule may apply, either the bilateral CH-IT or the internal EU law for UK-IT (at least until 1st Jan 2021...). If you documents say something different from reality, you might have to one of the two...
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Old 14.09.2020, 08:40
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Re: Working for an Italian Company from Zurich - taxes??

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Hi Laura,

I agree with Medea.

There is a bilateral agreement between CH and IT, it says that "fiscal residence" is where one lives and conducts his business for more than 50% of the year.
When you say "I live in Zurich" the implication is that you must pay your taxes in CH, period.

Now, you also say "my residence is in London". Well, I am only familiar with the CH-IT agreements, but the 50% rule is kind of an international principle. Should it also apply to UK, it means that "reside in London" and "living in Zurich" may be incompatible statements from a legal and fiscal point of view.
It is also incompatible with Swiss immigration law, you can't "live in Zurich" without having your residency in Zurich, unless maybe for some corner cases.

I guess you should first clarify what your legal status officially is and if you look like a UK resident or a CH resident in front of the Italian law; depending on which one a different rule may apply, either the bilateral CH-IT or the internal EU law for UK-IT (at least until 1st Jan 2021...). If you documents say something different from reality, you might have to one of the two...
It's quite possible to be dual tax resident, UK & Swiss in this case with liability to worldwide income in both countries & CGT in the UK. Credit is given for tax paid elsewhere so the highest tax amount will always be payable. UK has way less allowable deductions than CH. (AHV/Travel/Meals/Training/Health & Accident insurance not deductible in the UK)
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Old 14.09.2020, 09:00
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Hello everyone, hope you're doing well.
I would love you to answer to some info related to taxes/job contracts etc.

From Monday I've started remotely (as a freelancer) for an Italian Company. We actually don't have any contract as I'm trying to figure out which is the best thing to do because it's a pretty new thing for me.
My residence is in London but I actually live in Zurich.
I was thinking to start a business (Ltd) through an agency in the UK (also because it is the cheapest place where to do it) but in this case, how does it work for taxes? Should I pay them in the UK, Italy, or Switzerland?

If someone could help me would be great guys!
Thank you so much,
Laura
Thank you for replying. I actually have a B permit valid until January 2021

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Yeah, first point is do you have a residency permit that also allows you to work?

Not sure what you mean by residence in London since, if you live here, this is where you're resident as far as tax situation goes - that's what the Swiss will say anyway.
Thanks for your reply Medea. I’m registered to the UK AIRE as I used to live there until the last June. When I relocated to Zurich I applied for a Visa and I actually have a B permit valid until January 2021

Last edited by roegner; 14.09.2020 at 11:03. Reason: Merging consecutive posts
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Old 14.09.2020, 09:18
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Re: Working for an Italian Company from Zurich - taxes??

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Hi Laura,

I agree with Medea.

There is a bilateral agreement between CH and IT, it says that "fiscal residence" is where one lives and conducts his business for more than 50% of the year.
When you say "I live in Zurich" the implication is that you must pay your taxes in CH, period.

Now, you also say "my residence is in London". Well, I am only familiar with the CH-IT agreements, but the 50% rule is kind of an international principle. Should it also apply to UK, it means that "reside in London" and "living in Zurich" may be incompatible statements from a legal and fiscal point of view.
It is also incompatible with Swiss immigration law, you can't "live in Zurich" without having your residency in Zurich, unless maybe for some corner cases.

I guess you should first clarify what your legal status officially is and if you look like a UK resident or a CH resident in front of the Italian law; depending on which one a different rule may apply, either the bilateral CH-IT or the internal EU law for UK-IT (at least until 1st Jan 2021...). If you documents say something different from reality, you might have to one of the two...
Hi Venetian,
I'm still registered to the UK aire. Right now I have a Swiss B permit valid until January 2021
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Old 14.09.2020, 09:26
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Re: Working for an Italian Company from Zurich - taxes??

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Hi Venetian,
I'm still registered to the UK aire. Right now I have a Swiss B permit valid until January 2021
So you're Italian, you are not living in the UK but claiming to do so to the Italian authorities. What could possibly go wrong, you are in Schengen so the Italians would know for a fact you are not in the UK if they looked.
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Old 14.09.2020, 09:31
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Re: Working for an Italian Company from Zurich - taxes??

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So you're Italian, you are not living in the UK but claiming to do so to the Italian authorities. What could possibly go wrong, you are in Schengen so the Italians would know for a fact you are not in the UK if they looked.
My idea is to settle a business in UK as, from my understanding, it's easier and cheaper than Switzerland but I could be wrong. I will eventually register to the CH aire, but I'm trying to figure out the best solution.
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Old 14.09.2020, 09:36
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Re: Working for an Italian Company from Zurich - taxes??

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My idea is to settle a business in UK as, from my understanding, it's easier and cheaper than Switzerland but I could be wrong. I will eventually register to the CH aire, but I'm trying to figure out the best solution.
UK has a law 'Failure to prevent facilitation of tax evasion' which would apply in this case to any company that assists you.
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Old 14.09.2020, 09:52
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Re: Working for an Italian Company from Zurich - taxes??

Why not just register as SP in Switzerland and do things simply? Tax here is friendly and much less work than a UK limited company or whatever.

Plus you are absolutely not UK resident which will create issues at some point in the long run.

Why are these schemes so often thought up by Italians? That's an observation not a criticism
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Old 14.09.2020, 09:53
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Re: Working for an Italian Company from Zurich - taxes??

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Hi Venetian,
I'm still registered to the UK aire. Right now I have a Swiss B permit valid until January 2021
In this case I would say your residence (both fiscal and "civil") is in Zurich, and if by AIRE you mean the register of italians abroad I guess you are requested to update it by going to the consulate in Zurich. See https://conszurigo.esteri.it/consola.../anagrafe.html section "Variazione dei dati d'iscrizione all'A.I.R.E.".

The bilateral UK-CH looks very very similar to the IT-CH one:
Quote:
(1) For the purposes of this Convention, the term “resident of a Contracting State” means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. [...]

(2) Where by reason of the provisions of paragraph (1) an individual is a resident of both Contracting States, then his status shall be determined as follows:
(a) he shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests);
(b) if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode;

https://assets.publishing.service.go...s_in_force.pdf
With my understanding of your situation and the law, I think you should pay taxes in CH even with an Ltd in UK.
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Old 14.09.2020, 09:55
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Re: Working for an Italian Company from Zurich - taxes??

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Why not just register as SP in Switzerland and do things simply? Tax here is friendly and much less work than a UK limited company or whatever.

Plus you are absolutely not UK resident which will create issues at some point in the long run.

Why are these schemes so often thought up by Italians? That's an observation not a criticism
I was thinking to start a business in UK just because it seems to be much easier and cheaper than here in Switzerland and I'm not planning to stay here for the long time as I'm trying to settle my job as a "digital nomad"
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Old 14.09.2020, 10:02
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I will eventually register to the CH aire, but I'm trying to figure out the best solution.
You have to register to AIRE in the circoscription of Zurich consulate.
After that you can figure out the best solution.

On the other side, I don't think AIRE will affect your ability to open an Ltd in the UK, since it's an "internal" Italian register and not a UK residence certificate - if you can now you'll be able to do it also after your AIRE update.

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I was thinking to start a business in UK just because it seems to be much easier and cheaper than here in Switzerland and I'm not planning to stay here for the long time as I'm trying to settle my job as a "digital nomad"
I see your point, I've a couple of friends trying that (mainly talking about it).
The problem is, despite modern possibilities, tax rules are still bound to the concept of "residency", with updated rules on how to determine it. It can be where you receive your paper mail, or the country where you pay health insurance, or the country where you own a car. Or simply the country where you have been the most time in a year. You will always have ONE fiscal residence, and that must be your starting point if you want to do things legally. Currently it seems to be Zurich (also according to UK-CH treaties).

With Google I found this article that elaborates a bit what I wrote above:

https://nomadcapitalist.com/2019/08/...owhere-harder/

Last edited by roegner; 14.09.2020 at 11:04. Reason: Merging consecutive posts
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Old 14.09.2020, 10:14
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Re: Working for an Italian Company from Zurich - taxes??

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I was thinking to start a business in UK just because it seems to be much easier and cheaper than here in Switzerland and I'm not planning to stay here for the long time as I'm trying to settle my job as a "digital nomad"
Then you need to live in a country that only taxes remitted income, rather than world wide income. Malta works, however you have a €5000 min tax liability if you wish to be taxed as a non domiciled resident, thats roughly equivalent of €35k remitted income.
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Old 14.09.2020, 12:40
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Re: Working for an Italian Company from Zurich - taxes??

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I was thinking to start a business in UK just because it seems to be much easier and cheaper than here in Switzerland
You already started a business here in Switzerland. *dhuu* How cheap and easy was that? (No, this is not a joke!)
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