Is it true that tax rate is levied on your salary based on place you reside and not place you work for ? Someone told if i work in Zurich and live in Zug i will liable for tax rate in Zug not Zurich . Can someone plz confirm?
Hi
Where you live. But the first 5 years you will pay tax at source so the benefit isn ́t that big.
Paying Zug tax at source will still be quite a lot less than paying Zurich tax at source though. I was also under the impression that anyone could request to file a tax return now and there’s no need to be earning over 120k to do so. You do need to do the sums to make sure it makes sense though, especially if you are living in a community with a higher than average for the canton tax rate.
There is also the possibility of communicating directly with Zug tax department. Given the amount of tax dodgers living there, I bet they speak English 🤪
Place of residence is relevant. Unless place of residence is abroad, or you are self employed. Art. 3 and 4 Steuerharmonisierungsgesetz
You can submit a regular tax declaration (Nachträgliche ordentliche Veranlagung) but if you do it once you will need to do it every year. The simplified declaration for employees taxed at source is not possible anymore.
According to your profile, you're non-EU. Make sure you get permission from both cantons before trying to live in one and work in the other.
I've had the situation where I was employed by one of the big employment agencies and working in Basel Stadt on an L permit (and completing an annual return).
I moved to Solothurn but my tax rate didn't, my employment income was BS due to an agreement Adecco had with the canton.
Tax rates, seemingly straightforward, can be incredibly complicated. If you can, work and live in the same canton and don't move outside of the same Gemeinde, that would be easiest... or, at least, for the first 20 years!
This, exactly. The first thing to check. But even if you are granted permission, your life will probably be easier, administratively, if you just live and work in the same canton.
Moving canton can be tricky as as I understand it sometimes you're taxed based on where you were at the start of the year and other times where you live at the end of the year, for the entire year.
Any agreements your employer has need to be with the canton you live in otherwise they can be rejected. There was a bit of a scandal about this a number of years ago with a certain payroll provider.
I was residing in Zug and employed in another canton.
Tax was deducted at source via pay each month.
I was on a permit B.
Once a year Deloitte completed a tax return form with various deductions ‘ declarations etc.
A few months later I received a pink slip to pay any shortfall.
Deloitte was funded by employer.
You mean you were taxed based on canton your office situated?
I have this same situation - I'm on Permit B, Deloitte (paid for by my employer) do my taxes. I'm assuming you are on an EU Permit B?
maryshilpa, as others have said, please be cautious here - there are two different Permit B types. One for people of EU citizenship, and one for all others ('third countries'). Ravenk's tax situation, although he/she appears to be on the same permit type as you, may not be applicable to your situation.
In the case of third country B Permit types, living and working in different cantons is complicated, and you will need permission.
You're in the right place though - there are lots of people on here with many years of experience who can provide good advice. And your employer's Human Resources department will probably be able to answer your questions too. Good luck with it all.
Please be careful of the terminology here as well - taxed at source simply means that the employer withholds your income tax and pays you net of tax every month. They pay the tax they withhold to the relevant canton. That would be the one you live in, not where you work most of the time. It does not mean that you pay the tax rate applicable to your employer’s location.
All it means is that unlike Swiss and those with long-term permits the state doesn’t trust you to pay your taxes at the end of the tax year because you may have left the country by then...so they require your employer to withhold tax with every salary payment. If you’re here long enough you’ll get a different permit and your employer will only deduct your social security and pension contributions and leave you to pay your tax yourself.
Well, at least here - after 5 years - you get the chance to pay taxes whenever you want. I have never ever seen that amount of trust in another country. They will continue to deduct your taxes all the time.
Fair point. And yet many people - including Swiss people - would probably get into less trouble or fuss about tax if only they could always have their tax deducted by the employer.
What do you think the 13th (and 14th) salary is for.
Not everyone gets one of those. And of those who do, not everyone knows to set it aside for tax.
Anyway, back to OP: as others have said, you will be taxed at source, i.e. the taxes will be deducted from your salary by your employer (who then sends them to the tax office), so all these other posts, including mine, about saving up to pay your own taxed will not apply to you until you've lived in Switzerland for at least 5 years.
That made my day You sounded as if anyone choosing to pay lower taxes or anyone choosing to earn better when possible, just by moving places on the earth was doing something despicable
Spot on and that’s how it worked for the 4 years I was working in Switzerland.
I’m British and was a permit B.
I applied for Permit B at 3pm at immigration office.
Permit B for myself and wife arrived in next days post ...