CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Switzerland To Amend Income WHT Regime For Foreigners

Switzerland To Amend Income WHT Regime For Foreigners

by Ulrika Lomas, Tax-News.com, Brussels

02 December 2014


Reforms agreed by the Swiss Federal Council will mean that anyone resident in Switzerland whose income is taxed at source will be given the option of a subsequent ordinary tax assessment.

The Council has adopted a dispatch on planned legislative amendments to the withholding tax (WHT) system for earned income. The changes are being introduced as the result of a Federal Supreme Court (FSC) ruling in January 2010. The FSC decided that, in certain cases, the WHT regime contravenes the Agreement on the Free Movement of Persons concluded with the European Union.

At present, WHT is levied at source on the income of foreign employees in Switzerland who do not have a permanent residence permit (C permit). Approximately 760,000 employees fall into this category. Of this number, 490,000 have their tax domicile or place of residence in Switzerland and are therefore considered residents. "Quasi-residents" are those employees who do not have their tax domicile or place of residence in Switzerland, but generate a major part of their global income there.

According to the FSC, "quasi-residents" who earn more than 90 percent of their global income in Switzerland are entitled to the same deductions as those subject to ordinary taxation in Switzerland.

Under the changes, WHT would still be levied, but all residents taxed at source would have the option of a subsequent ordinary tax assessment. Above an income threshold – still to be determined by the Council – these residents would officially be subject to a subsequent ordinary tax assessment. A supplementary ordinary tax assessment, which includes income and assets not subject to WHT, would be replaced by the subsequent ordinary tax assessment.

The Council said that it is not possible to estimate the financial impact of the changes, due to a lack of reliable data. It added that the cantonal tax authorities would need to carry out additional assessment-related work.

TAGS: expatriates | tax | law | employees | professionals | withholding tax | Switzerland | tax reform | individual income tax | European Union (EU) | Europe

To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »