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Old 27.01.2009, 13:50
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Withholding Tax

Hi,

I've been scouring the forum for a few hours and whilst there is lots of useful information, I can't find an answer to my specific question. If anyone knows of a thread where this has been answered please point it out to me!

Ok then, Withholding Tax. As far as we can tell for us it's roughly the equivalent of UK Income Tax. As a Swiss resident you pay your tax bill at the end of the year, but foreigners pay theirs monthly to stop them doing a runner after 11 months. Fair enough.

Can someone advise what happens in the following situation:

You earn under 120k a year, but get a relocation bonus in the first month of the year. Even with this bonus, you still don't exceed the 120k. Withholding tax is obviously much larger as a percentage for this one month than for a normal month, because of the larger salary payment.

Next month, the Withholding tax will be a smaller amount to reflect the lower salary payment and should (I imagine?) remain the same for the remainder of the year.

Is there any way to claim back any money from that first huge Withholding tax payment as it isn't a true reflection of the "normal" salary? If you earn under 120k you don't get the chance to fill in a tax form as far as I can tell..

Or is it simply that the Withholding tax percentage is worked out per single month and that's it - if you earn extra in a single month you pay more tax and tough luck.

Thanks in advance
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Old 11.03.2009, 11:26
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Re: Withholding Tax

Hi
Fear not, this happens to me every year! Being a frontalier in France (and formerly a european B permit holder in Geneva) I have always been taxed at source and the % rate of taxation is based on the monthly income. Thus, every year come bonus time, I get a much bigger payment for that one month but the % rate of tax is also much higher. HOWEVER, at the end of the year, my salaries department takes my annual income for the whole year and adjusts the rate of tax retroactively. The resulting "tax return" is included in my December pay slip - just in time for Christmas! A perfect set-up
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Old 11.03.2009, 11:30
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Re: Withholding Tax

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Hi
Fear not, this happens to me every year! Being a frontalier in France (and formerly a european B permit holder in Geneva) I have always been taxed at source and the % rate of taxation is based on the monthly income. Thus, every year come bonus time, I get a much bigger payment for that one month but the % rate of tax is also much higher. HOWEVER, at the end of the year, my salaries department takes my annual income for the whole year and adjusts the rate of tax retroactively. The resulting "tax return" is included in my December pay slip - just in time for Christmas! A perfect set-up
I should perhaps add that this applies in the Canton of Geneva but I can't speak for other cantons. I'll be moving to Zürich soon (Euro B permit again) so I'd be interested to know if it works that way there too (not wishing to hijack your post though, mattb001 )
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Old 11.03.2009, 11:46
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Re: Withholding Tax

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I should perhaps add that this applies in the Canton of Geneva but I can't speak for other cantons. I'll be moving to Zürich soon (Euro B permit again) so I'd be interested to know if it works that way there too (not wishing to hijack your post though, mattb001 http://www.englishforum.ch/images/smilies/wink.gif)
looks like you're stuffed.

unless you can break the 120k threshold it is difficult to claim back the tax. It is possible but you will have to plead a good case to the local tax ofice. Some things to consider:

to you have, wealth, property, stocks/shares else any where else in the world that would need to be declared in CH if you were to make a tax return?

for the future: get your employers to spread the relocation allowance over 6--12 months so you don't take the massive one off tax hit.

bill
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Old 03.04.2009, 09:55
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Re: Withholding Tax

How does tax for a B permit holder work if you break the CHF 120k barrier? Are you still deducted at source but have to fill in a tax return as well? Or is it just a tax return, like the Swiss?

I've been taxed at source forever and dread the thought of filling in a tax return (chicken that I am) and this year, I'll be getting a bonus paid in Geneva (over-taxed as mentioned in my earlier post), moving to Zurich half-way through the year, then getting a relocation bonus in Zurich a month after arriving and by then we'll have to declare our current home in France as a second-home (rented out) as well. The mind boggles...
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Old 03.04.2009, 11:06
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Re: Withholding Tax

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How does tax for a B permit holder work if you break the CHF 120k barrier? Are you still deducted at source but have to fill in a tax return as well? Or is it just a tax return, like the Swiss?
there is extensive info in the tax threads

http://www.englishforum.ch/tags/tax/
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