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Old 26.10.2009, 18:48
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Swiss taxation for foreign residents

Hello. Am retired US citizen and residing in Switzerland (C permit). Have just received a note from tax office in canton of Jura asking me where my source of revenue comes from. Am no longer employed and live off my investments made in the US while working (stock, mutual funds). I transfer approx. USD 30,000 to Swiss account for living expenses yearly that includes also a small social security check. Am paying capital gain tax in the US. What do I tell the Swiss authorities and am I going to be taxed on these transfered funds in Switzerland again? Thanks for knowledgeable reply. bob
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Old 26.10.2009, 18:52
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Re: Swiss taxation for foreign residents

Hi if I was you I'd ask someone (and pay) for exact and official information.
Good luck.
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  #3  
Old 26.10.2009, 18:54
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Re: Swiss taxation for foreign residents

Hello and welcome to the forum Bobschoos !
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Old 26.10.2009, 18:56
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Re: Swiss taxation for foreign residents

hi stop yes stop you will have to pay stop swiss income & wealth tax stop
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Old 26.10.2009, 19:00
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Re: Swiss taxation for foreign residents

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hi stop yes stop you will have to pay stop swiss income & wealth tax stop
I count more than ten words there.

Spendthrift.
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Old 26.10.2009, 19:11
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Re: Swiss taxation for foreign residents

Ops. Most importly, you cannot ignor it. Like any american living here, you will have to report your worldwide networth(and pay taxes on it) and pay taxes here on your "income". You can deduct the swiss taxes that you pay here from your US tax liability.
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Old 26.10.2009, 19:22
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Re: Swiss taxation for foreign residents

You really need a tax advisor. Most of the people here know
a little bit about taxes, but you have a unique tax situation
that needs professional advice.
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Old 26.10.2009, 19:29
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Re: Swiss taxation for foreign residents

There's nothing unique about your tax situation. You have money, the government wants to tax it.
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Old 26.10.2009, 20:02
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Re: Swiss taxation for foreign residents

BobSchoos: Please read the US-CH tax treaty here, especially Article 23 (Relief from Double Taxation). You may be exempt from CH taxes, or due a tax credit, or simply a tax deduction. The IRS website for tax treaties is here. As importantly, read the Technical Explanation for Article 23.

It certainly is prudent to seek professional help, but be sure that person has carefully read the US-CH tax treaty, and has researched the CH case law if any.

Last edited by jwalker46; 26.10.2009 at 20:12. Reason: typo & addenda
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Old 26.10.2009, 21:37
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Re: Swiss taxation for foreign residents

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There's nothing unique about your tax situation. You have money, the government wants to tax it.
You live in Switzerland. You pay taxes in Switzerland. Simple.
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Old 26.10.2009, 22:31
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Re: Swiss taxation for foreign residents

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You live in Switzerland. You pay taxes in Switzerland. Simple.
Yes, but which taxes? As usual, the devil is in the details.

Some categories of income are taxed only in the country where the income originates (via exemption or via tax credits), or at a lower rate (via tax deductions). So, your generalization does not hold.

As a simple example, cited in the Technical Explanation (pg 74), capital gains on US real estate earned by a Swiss resident (whether a US or a CH citizen) are exempt from Swiss taxation:

"Gain from real property situated in the United States...[is] exempt from Swiss taxation if U.S. taxation on such gains is demonstrated by the Swiss resident."
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Old 26.10.2009, 23:25
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Re: Swiss taxation for foreign residents

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Yes, but which taxes? As usual, the devil is in the details.

Some categories of income are taxed only in the country where the income originates (via exemption or via tax credits), or at a lower rate (via tax deductions). So, your generalization does not hold.

As a simple example, cited in the Technical Explanation (pg 74), capital gains on US real estate earned by a Swiss resident (whether a US or a CH citizen) are exempt from Swiss taxation:

"Gain from real property situated in the United States...[is] exempt from Swiss taxation if U.S. taxation on such gains is demonstrated by the Swiss resident."
Obviously tax rules are not identical in CH and US. Some items are taxable in both but there may be relief from cumulative taxation.

Other items are only taxable in one country. For example, CH has wealth taxes on global assets. I hear that US does not collect wealth taxes but requires declaration of offshore assets above a threshold.
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Old 26.10.2009, 23:41
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Re: Swiss taxation for foreign residents

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I hear that US does not collect wealth taxes but requires declaration of offshore assets above a threshold.
Not at all; there is a required a declaration of foreign financial accounts (and assorted other transactions), but not of total assets. For example, an American could own European real estate worth several million dollars, and not have any obligation to declare that to the government.
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Old 27.10.2009, 07:18
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Re: Swiss taxation for foreign residents

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I hear that US does not collect wealth taxes but requires declaration of offshore assets above a threshold.
It depends on the state.
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Old 27.10.2009, 09:55
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Re: Swiss taxation for foreign residents

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It depends on the state.
Can you please cite the statute, for any state, which (as Goldtop wrote) "requires declaration of offshore assets above a threshold"?

There is estate taxation (inheritance tax) in the US (as in some Cantons, I believe?), and that does require a declaration of a deceased person's assets, but that isn't at all the same topic Goldtop was addressing (declaration of offshore assets).
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Old 27.10.2009, 10:19
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Re: Swiss taxation for foreign residents

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I hear that US does not collect wealth taxes
I probably should have pared down my statement a bit further.

There are several states that collect wealth taxes. Two, off
the top of my head are South Carolina and Arkansas.

Last edited by HollidayG; 27.10.2009 at 10:21. Reason: Forgot the T
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Old 27.10.2009, 11:07
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Re: Swiss taxation for foreign residents

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There are several states that collect wealth taxes. Two, off the top of my head are South Carolina and Arkansas.
Please cite the statutes, or the tax form, or some reputable source.

Similarly, as I asked above, please cite the statute or form which requires you to declare foreign assets above a certain threshold (as you stated in reply to Goldtop).

From the accounting firm Grant Thornton here: "There is no wealth tax in the U.S."
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Old 27.10.2009, 12:01
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Re: Swiss taxation for foreign residents

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From the accounting firm Grant Thornton here: "There is no wealth tax in the U.S."
Yup, they're right. It's called "personal property taxes". Now it's all academic whether "personal property" can be equated to "wealth".
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Old 27.10.2009, 12:07
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Re: Swiss taxation for foreign residents

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Please cite the statutes, or the tax form, or some reputable source.

Similarly, as I asked above, please cite the statute or form which requires you to declare foreign assets above a certain threshold (as you stated in reply to Goldtop).

From the accounting firm Grant Thornton here: "There is no wealth tax in the U.S."
I cannot quote a specific statute, but my friend in South Carolina declares
property every year upon which he pays a tax.
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Old 27.10.2009, 12:14
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Re: Swiss taxation for foreign residents

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I cannot quote a specific statute, but my friend in South Carolina declares property every year upon which he pays a tax.
That is a tax on real property (the value of land, housing, etc.) located in the state. That tax does not apply to real property held in other states, nor on total assets. Thus, that is not a tax on wealth (total assets less total liabilities).

Please see the Grant Thornton publication I linked to above: "There is no wealth tax in the U.S."
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