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Old 17.01.2012, 17:41
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Sub-letting and invoices

I have a small flat in Basel that I've been renting for over ten years now. Not much used, just really a crash pad for nights out in town, so when a work colleague from a different site was looking for somewhere to sleep for four or five days per month, we happily agreed to let him use it and pay (much less than his hotels were costing) something towards the rent. (In fact, it's more than half the rent we pay, which is a pittance, as it's a tiny studio on a noisy road).

So anyway, his boss is now saying that the company will pay his expenses, which in the past he was doing himself, given his own choice about working from home (In Spain) for most of the time. Trouble is, to claim it back, he would need an invoice from us.

Now this would be fine, easy enough to knock something up, but it seems to me that if we start invoicing him and he uses that to claim back expenses there's a possibility of 'the authorities' becoming aware of it and tracking it back to us, so we then might be in trouble if we don't declare it as taxable income, and/or be in breach of our rental contract.

Anyone had any similar experience, or know if there's no way this could happen? I'm not really interested in changing anything about how we rent the flat, as all else apart, I'm pretty sure the rent would go up significantly if we changed our agreement with the agency, but I'm keen to stay on the squeeky clean side of anything relating to tax or housing rules.

Any info gratefully received.
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Old 17.01.2012, 20:21
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Re: Sub-letting and invoices

I don't think rental income is taxable in CH, owners are taxed on theoreetical income & thats it.
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Old 17.01.2012, 23:42
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Re: Sub-letting and invoices

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I don't think rental income is taxable in CH, owners are taxed on theoreetical income & thats it.
If you own an apartment or a house and you live there - then you are taxed on the theoretical income. If you have rented it out - you are taxed on the actual income.

My understanding, however, is that Ace1 is renting the apartment; any sub-rental income from a Swiss property is subject to Swiss tax. If Ace1 is domiciled in the same canton where the apartment is located, it is most likely that the tax authorities will have some questions if the rental income is not declared. This provided that the other guy is subject to Swiss tax and for any reason, he would submit the rental invoices to the tax office (e.g. to get a refund of the source tax).

As regards the rental contract - theoretically, one needs to inform the landlord if the apartment is going to be sub-leased. There are only few cases when the landlord can deny the approval, e.g. if the sub-rent is too high ("missbräuchlich").
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Old 18.01.2012, 09:10
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Re: Sub-letting and invoices

Thanks for the info. To clarify: No, we don't pay tax in the canton where we rent this flat; no, the sub-tenant will not be claiming tax back, just company expenses, so it's a question of whether the company would then do anything with the invoices he submits for his expense claim or not; in terms of the sub-letting, we're still using the place ourselves, just reserving the few days per month when our sub-tenant let us know he's going to need it, so I'm really not keen to try and change any agreement with the landlord.
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Old 18.01.2012, 09:33
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Re: Sub-letting and invoices

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Thanks for the info. To clarify: No, we don't pay tax in the canton where we rent this flat; no, the sub-tenant will not be claiming tax back, just company expenses, so it's a question of whether the company would then do anything with the invoices he submits for his expense claim or not; in terms of the sub-letting, we're still using the place ourselves, just reserving the few days per month when our sub-tenant let us know he's going to need it, so I'm really not keen to try and change any agreement with the landlord.
My company, big multi-national, requires invoices presented for reimbursement to have the taxable portion identified as they are able to claim this back in their taxes.
If his company does the same, and you present an invoice with a stated taxable portion but you are not actually paying the taxes, you could find youself in the deep end rather quickly if the companies tax back filings are audited (which I'm told by mine happens on a regular basis)

If I were in your situation I would check with a qualified tax expert on what you need to do to stay on the right side of things
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Old 18.01.2012, 18:16
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Re: Sub-letting and invoices

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Thanks for the info. To clarify: No, we don't pay tax in the canton where we rent this flat; no, the sub-tenant will not be claiming tax back, just company expenses, so it's a question of whether the company would then do anything with the invoices he submits for his expense claim or not; in terms of the sub-letting, we're still using the place ourselves, just reserving the few days per month when our sub-tenant let us know he's going to need it, so I'm really not keen to try and change any agreement with the landlord.
I would say that in such a case, the risk is rather small that the tax office would track back to you. During a tax audit of the company, the tax authorities would be focused on business related issues (and not on the tax returns of individuals).

Further, my understanding is that your sub-rental income is less than the rent you are paying for the apartment. So actually, in case of questions from the tax office, you should argue that the sub-lease just helps you to reduce the rental costs and you are not making any profits out of the sub-lease, and consequently, you do not have any net profit to declare.
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Old 18.01.2012, 20:11
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Re: Sub-letting and invoices

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Further, my understanding is that your sub-rental income is less than the rent you are paying for the apartment. So actually, in case of questions from the tax office, you should argue that the sub-lease just helps you to reduce the rental costs and you are not making any profits out of the sub-lease, and consequently, you do not have any net profit to declare.
Very good point and correct. As you're not the owner and you still pay more per month than you would collect there is no profit so therefore no tax obligation.
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Old 17.06.2012, 17:33
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Re: Sub-letting and invoices

Hi All,

I recently moved to Kanton Zürich from another Kanton. I am currently staying at a friend`s apartment, while I search for my own apartment.
My friend rents the apartment. I am told that it can take a long time to secure a rental apartment in Zurich.

Upon registering with the Kanton Zürich Migrationsamt, they asked for a copy of a subletting contract. As we don`t currently have a sub-letting contract in place, I will therefore need to arrange one.

If the landlord approves of me staying in the apartment, does the landlord supply a copy of a sub-letting contract? If not, is there anywhere that I can download a copy of a rental contract, in order to speed up the process?

Thanks in advance.

Best regards,

JAA
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