First I've heard of this... Can anyone comment on the applicable tax laws?
I've heard something interesting about my employer's relocation package for expats. If they give you the bonus to use for relocating your personal effects from the US, it's counted as taxable income. If they give you the bonus to use within CH for buying the things you need, the money is not taxed as income.
Both fringe benefits are taxable income.
That's what I thought. I wonder if they are sidestepping tax law by allowing the employee to submit their personal purchases on an expense report (for later reimbursement) after arrival.
Employer must record and report expense reimbursements on the employee's salary certificate, which is the basis for income tax.
Are you saying that the concept of a reimbursed employee business expense does not exist in CH?
I was told by my Swiss employer:
- If they give you cash and you pay for a plane ticket - it's taxable income.
- If they pay for your flights - it's not taxable income.
They told me this after paying me cash and taxing me royally on it.
Yes, the concept does exist. As long as it's a business related expense and the employer either pays for it directly or reimburses you for an actual expense / receipt.
Not sure how this would work for furniture or other household items.
With my employer money paid to the employee for flights home is a taxable benefit whereas airline tickets are not taxable. Because the company buys refundable tickets, many employees choose a cheaper flight and pocket the difference. If you are eligible for an expatriate allowance as part of the compensation a portion of it is counted as a non-taxable benefit. I guess the logic is the expat has some expenses (e.g. maintaining a home base) that the local does not have. But if you have to file US taxes be aware that these allowances are fully taxable in the USA and so you might end up paying tax over there.
no idea what you guys are talking about. in CH what goldtop tells us here is correct. if your employer reimburses you for any expenses they HAVE to be declared by the employer on _your_ personal end of year tax statement, which is used for making your tax return.
Still not sure if what you're writing is correct.
My employer orders me to fly to London. I fly to London. Employer pays for the ticket (and the hotel and ...).
Why would that be personal income? It's a taxable expense for the employer, and a zero sum game for me. I don't report those expenses on my taxes because the employer paid for them. That how it's done in D, CH, USA AFAIK.
Wrong. All my employers have done reimbursements directly to my bank account so far and it's never been mentioned as income in the salary statements.
I am paying in the name of my employer and the employer gives me the money back, why should I pay income tax off a transaction where I gain absolutely nothing?
Traveling for a business purpose, e.g. to meet a client, work at a branch office, in a project context, etc. are business expenses. Those are not taxable because the employer books it against a project.
Reimbursement of moving expenses, furniture purchase, private use of company car, etc. are taxable in the hands of the employee because those are considered to be for living.
Note that starting January 2008, a new salary certificate became mandatory. Simultaneously the rules on taxable fringe benefits changed.
If so, the employee is defrauding either the employer or the tax department or both.
The employer should submit their expense reimbursement rules to the tax authorities. After the tax department approves the rule book, the employer can reimburse as defined in the "Spesen Reglement". Subsequently, the salary certificate contains the statement "Expenses reimbursed according to the S-R approved by the Canton XX".
The default reimbursement rules are published. If anyone wants, I can search the internet for it.
Whatever. I do have faith that my employer knows what the heck they're doing. They're Swiss, publicly traded, and have been around for a while.
Some specific tax deductions for expatriates are available in all cantons. It has to be applied for by the employer (tax at source) - or the expatriate himself if he has to submit a tax return (exceeds threshold of - usually - CHF 120'000 per year).
Do you know if this is the case in Olten canton? My employer will pay me CHF9k with my first pay packet next month for relocation costs. I wonder if I will get stung.........
In a word - Yes, but some payroll departments miscalculate .
If your income is high enough, you will be able to submit a tax return and claim some of them back, so be sure to keep all invoices, receipts etc.
Jim
you will, and pretty badly!! ask your HR department to spread the payments over several months.
I asked for that, and they refused. Tax hit in that one month was about 40% IIRC. Ouch. Still waiting for my 2007 tax refund.