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Old 16.08.2009, 01:03
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Double taxation US/Swiss

Hi to all,
So far this forum has been so helpful with previous posts that I made. I'd appreciate if anyone can give me a hint regarding double taxation in CH.

# If I have a B visa and will be working in Basel, will the Swiss government tax still tax the income that I generate in the United States from my real estate holdings?
Have a nice weekend,
George
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  #2  
Old 16.08.2009, 04:27
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Re: Double taxation US/Swiss

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Hi to all,
So far this forum has been so helpful with previous posts that I made. I'd appreciate if anyone can give me a hint regarding double taxation in CH.

# If I have a B visa and will be working in Basel, will the Swiss government tax still tax the income that I generate in the United States from my real estate holdings?
Have a nice weekend,
George
I'd like to know this too. I know very little about the issues of double taxation in Switzerland.

I do know that with the recent agreement between the US and Switzerland regarding UBS' disclosure of account information, tax sheltering here is on the wane, and the tax situation here is going to be very volatile for the foreseeable future.

Morg
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  #3  
Old 16.08.2009, 10:31
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Re: Double taxation US/Swiss

There are many threads discussing taxation of US citizens/'tax persons'... scroll down to the bottom of this page, several are linked.

The very much condensed and simplified version:

One pays tax first to the country of residence. Switzerland (or more accurately, the cantons) levies a tax on worldwide wealth; if you hold foreign real estate, perhaps a chat with a qualified tax advisor is in order.

See:
http://www.taxation.ch/index.cfm/fus...path/1-534.htm

And:

http://www.ch.ch/private/00093/00098/index.html?lang=en

But hey, at least in the Swiss system the bulk of the tax I pay stays in my Gemeinde and canton, and I can actually see the benefit to my community.

You should be more worried about how much the US government is going to stick you for...

A US citizen is taxed by the US government on worldwide income, regardless of where in the world one lives.

Essentially, once you qualify as a overseas resident, you may claim the standard expat deduction of 87,000-ish, and/or credit for (most of the) taxes paid to the host country.

Generally, one ends up paying at least an amount equal to the US tax liability, either to one country or the other. Often expats end up with a greater total tax liability, as the deductions often force you into the AMT, some employer-provided benefits may have significant tax consequences, some expat deductions may be reduced by the amount of time one spends back in the US, etc.

Overall, as an expat living in a very low tax Swiss Gemeinde, taking all deductions and increases on the US Federal side in to account, my total tax liability to CH and US combined is about 3-5% more than if I were a US resident.

YMMV.

Additionally, if you last lived in a domicile state, you may also end up owing state income tax. And if you worked in the US while resident in CH, you may owe pro-rated state taxes for the time you worked there.

Bottom line, while as expats we are not counted in the census and may vote only in federal elections, we still end up paying a boat-load of taxes to the US government. The blue passport is a rather expensive accessory. And I expect it to become even more expensive going forward.

Obviously taxes become quite complex when you are a US citizen resident overseas; prior to a move one really should to do some tax planning with a qualified advisor whose expertise covers both US and Swiss tax law.

Oh - and don't forget to file your FBAR...
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Old 16.08.2009, 13:52
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Re: Double taxation US/Swiss

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Hi to all,
So far this forum has been so helpful with previous posts that I made. I'd appreciate if anyone can give me a hint regarding double taxation in CH.

# If I have a B visa and will be working in Basel, will the Swiss government tax still tax the income that I generate in the United States from my real estate holdings?
Have a nice weekend,
George
You must pay taxes in CH: income tax on income and also wealth tax on all global assets. The capital value of your US real estate is taxable in CH.
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Old 16.08.2009, 14:28
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Re: Double taxation US/Swiss

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There are many threads discussing taxation of US citizens/'tax persons'... scroll down to the bottom of this page, several are linked.

The very much condensed and simplified version:

One pays tax first to the country of residence. Switzerland (or more accurately, the cantons) levies a tax on worldwide wealth; if you hold foreign real estate, perhaps a chat with a qualified tax advisor is in order.

See:
http://www.taxation.ch/index.cfm/fus...path/1-534.htm

And:

http://www.ch.ch/private/00093/00098/index.html?lang=en

But hey, at least in the Swiss system the bulk of the tax I pay stays in my Gemeinde and canton, and I can actually see the benefit to my community.

You should be more worried about how much the US government is going to stick you for...

A US citizen is taxed by the US government on worldwide income, regardless of where in the world one lives.

Essentially, once you qualify as a overseas resident, you may claim the standard expat deduction of 87,000-ish, and/or credit for (most of the) taxes paid to the host country.

Generally, one ends up paying at least an amount equal to the US tax liability, either to one country or the other. Often expats end up with a greater total tax liability, as the deductions often force you into the AMT, some employer-provided benefits may have significant tax consequences, some expat deductions may be reduced by the amount of time one spends back in the US, etc.

Overall, as an expat living in a very low tax Swiss Gemeinde, taking all deductions and increases on the US Federal side in to account, my total tax liability to CH and US combined is about 3-5% more than if I were a US resident.

YMMV.

Additionally, if you last lived in a domicile state, you may also end up owing state income tax. And if you worked in the US while resident in CH, you may owe pro-rated state taxes for the time you worked there.

Bottom line, while as expats we are not counted in the census and may vote only in federal elections, we still end up paying a boat-load of taxes to the US government. The blue passport is a rather expensive accessory. And I expect it to become even more expensive going forward.

Obviously taxes become quite complex when you are a US citizen resident overseas; prior to a move one really should to do some tax planning with a qualified advisor whose expertise covers both US and Swiss tax law.

Oh - and don't forget to file your FBAR...
Well, it's been a great response. Thank you very much for all the details that you gave!. So, based on yours and the other posts I guess I'll be taxed in my real estate from here. Once I get the final approval from the Canton I'll talk with the Acc.
Thank again and have a good one.
G.
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Old 09.03.2016, 02:51
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Re: Double taxation US/Swiss

Sorry for bringing this topic from dust, but I have rather complicated situation.
I am currently working in the US on an H1B visa and received an offer to move to Switzerland in April.
I don't have any real estate in the US, bit would like to know how much tax I need to pay on Swiss income. Is it possible that I only pay the tax for the first three months in the US or I would have to pay the tax for future income made in Switzerland even though I would live in the US anymore?

Can someone help me with the math here, please?
Let's say I earn (for the sake of math) 100k gross in Switzerland, how much extra should I pay to the US based on this double taxation?
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Old 09.03.2016, 03:21
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Re: Double taxation US/Swiss

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Sorry for bringing this topic from dust, but I have rather complicated situation.
I am currently working in the US on an H1B visa and received an offer to move to Switzerland in April.
I don't have any real estate in the US, but would like to know how much tax I need to pay on Swiss income. Is it possible that I only pay the tax for the first three months in the US or I would have to pay the tax for future income made in Switzerland even though I would not live in the US anymore and I am not an US citizen?

Can someone help me with the math here, please?
Let's say I earn (for the sake of math) 100k gross in Switzerland, how much extra should I pay to the US based on this double taxation?
Mirekti, I was in a similar situation once (US H1B and moving to Switzerland) and I can tell you that there is no "one-size-fits-all" answer, hence, I recommend getting professional advice from a competent US tax professional specialized in expats/global mobility issues. There are cases where you want to save money - this is NOT one of them, because the issues are very complex and there is a lot of room for screw-ups.

Also, note that people with US visas outside of the US are NOT the same as US citizens and green card holders abroad - in other words, it is not automatic that they will be taxed on their worldwide income.

In my case (but YMMV) I moved to CH halfway through the year, and, after calculating the time spent in each country, together with my tax advisor, we determined that I qualified to file a federal 1040NR dual status income tax return and a California part-year resident income return. In my case, this allowed me to pay US tax only on certain US-sourced income (vs. my worldwide income) when I was a non-resident for US purposes. Obviously I paid Swiss tax on the applicable income per the Swiss tax rules.

For the following years, whether you have to file a US return, and if so, your resident/non resident status for US purposes depends on a variety of factors, such as if you spend more than a certain number of days in the US, whether you have certain specific types of US-sourced income (such as certain types of passive income), and others.

Hope this gave you some ideas for further research/questions to ask a professional advisor.

EDIT: also check out if you are subject to FBAR filings on your foreign accounts once you get to Switzerland and open one/more Swiss accounts.
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Old 09.03.2016, 03:50
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Re: Double taxation US/Swiss

Wow, this was rather quick. Thanks a lot!!!
It does seem the matter is more than complicated.
I will certainly need some proper tax consulting.
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Old 09.03.2016, 09:05
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Re: Double taxation US/Swiss

This may or may not help too:

https://www.irs.gov/Individuals/Inte...-Aliens-Abroad

I second BokerTov's advice though, talk to a specialist tax advisor. US tax is too damned complicated and the penalties for errors too high to risk making mistakes. FBAR penalty alone could be as high as $10,000 for failure to file per violation for nonwillful violations that are not due to reasonable cause. It gets much more expensive if it's deemed a wilful violation.

https://www.irs.gov/Businesses/Small...-Accounts-FBAR
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Old 09.03.2016, 16:50
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What about CH tax laws? If I came to CH in April, would I have to pay the income tax in CH for Jan-Mar income which is earned in the US?

BTW I found these documents on the IRS website, and I hope these can help the others as well.

https://www.irs.gov/pub/irs-trty/swiss.pdf
https://www.irs.gov/pub/irs-trty/swistech.pdf

Last edited by 3Wishes; 10.03.2016 at 03:54. Reason: merging consecutive replies
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