Einzelfirma: taxes +

Finance, Taxes, Banking, Insurance and Retirement
1
Hello everyone,

I would like to start an Enzelfirma; payments would arrive mainly from abroad.

I am a B permit holder and I would like to start it in Lugano, or, in the event, in Zurich.

I have read different threads here but I would like to ask some questions.

Please forgive me if I ask for something that has been asked before.

I know there should be about 10% VAT, they call it IVA in Lugano, but I was not able do get information on other taxes.

Sofar, I know there would be AHV contributions (at the end of the day about 10%) plus about 10% VAT, but I know in some cases you can avoid paying VAT ... I don ́t know how.

Does anyone have a complete list of taxes (with percentages)?

Can anyone advise on collateral expenses (legal insurance, other insurances, and so on)?

Does anyone have a list of criteria your place should fulfil (e.g., you need a separate room, or you live in a room and that is enough, you can take a contract with a guest house, a sub-rent)?

Has anyone an opinion on the convenience of starting an Einzelfirma in Switzerland when compared to other countries?

I know I am asking for much, but my official advisors let me down.

Thank you very much!

2
Yes, you are asking a lot... And I promise that I cannot answer each question. Basically, I learned by experience. I knew some of the basic precentages from a book from the "Beobachter" about starting your own business which offered the answers to which type of company would be best for me... Einzelfirma.

If your accountant is a good one, they should be able to answer your questions based upon your projected sales and income. I have not been surprised with the official bills that have come in compared to the figures from my accountant.

One thing, when a new company is started it is published. From all over Switzerland I received the invoices from so called directories and registers that included a bill for anywhere from CHF 360.- to CHF 1080.-. If it is not official (or if you are not sure, ask) then toss it... do not pay it! All they want is your money and offer nothing in return!

The only problem I had with having my office in my apartment, was the taxes allowed only 0.5 (one-half) of one room for business as a write off. Weak!

Another thought, I am not sure you can start a company with a B. Check with the local city officials.

If your turnover will be over (about) CHF 70,000.- then you should have a MWST number. If having a MWST number will help your turnover reach over CHF 70,000.- then you can get one too. Also, if you plan to ship outside of Switzerland, then a MWST number will save you (or your customers) from paying the Swiss MWST. Do it the official way, to keep your nose out of trouble!

AHV payments is a must. This is also based on projected, eventually actual earnings. I don't pay MWST on my AHV payment... never have either.

There is a list of insurances that are important depending on your type of business. I am sure there is a neutral insurance agent in your area that can help out... they don't cost you anything and usually will help you find the best policy for your situation. Also, regarding 2. and 3. pension, the second is a good idea if you can afford it... For the third, check into "branch related" pension group accounts. Mine is specifically for persons working in the special metals, optics and photography fields.

Good luck, if you have any more questions... feel free to contact me.

Bests

Scott

3
Trying to fill in the gaps when I see only a few holes is difficult... Rather a complete answer Scott...

Having a room or rooms from your accommodation is possible but often requires a separate entrance. If you have one then you can determine how many rooms you require.

You can start a company with a B permit although if you are not an EU citizen you will be jumping through hoops - surprise surprise.

With respect to your pensions you have them the wrong way round ie 2nd pillar is the company scheme. As a self employed person you can choose to have 3rd pillar only and this is then up to 30K per year as long as it is over 25% of your income.

Taxes: - there are only two types of tax you pay. Income tax and Value Added Tax. The VAT is optional for turnover under 75K and requires more work in the bookkeeping if you have this. Furthermore, you need to register your business in the company register which adds expense. As a self employed person you only need to inform the AHV through your Gemeinde. AHV/IVA is a personal deduction ie you deduct it from the salary you pay yourself. If you don't pay yourself anything you don't pay it - not strictly true as you need to pay a minimum. There are other deductions such as IV(invalid insurance) but you do not need to pay ALV (unemployment insurance) as you cannot claim anyway. You will also need to insure against liability and against accidents. Although the former is optional you are daft if you do not have it!

The amount of the insurance is dependent on the business and the cover you need and can vary between very little and a lot. accident insurance is relatively cheap and you can cover this through an addition on your health insurance for around 10Francs per month.

For business premises you can have a room in your house, or rent something specifically for the purpose. If you attempt to sub-let in someone's flat you are asking for problems as they would need to inform the authorities about it and they can say no depending on the business.

Starting a business in Switzerland is extremely easy you simply tell the AHV that you are from now on self employed. Alternatively you can create a business structure and officially register even as a PLC if you have the capital to pay the deposit.

Between Scott and I, we have covered all your points. If something is not clear ask a specific question and we will possibly answer...