Swiss tax liability for expats
Updated: Feb 6
The filing season for Swiss tax returns has begun. Employees working abroad have to consider a great deal of tax specialties.
As an expat you may be eligible for different tax types which are summarized below. Each tax type imposes various tax obligations. Wernli Tax Law Firm offers you support to comply with these tax obligations and advises expats whether voluntary tax returns may be recommended or not.
Cross-border commuter – Ger. Grenzgänger
You may qualify as a Grenzgänger if you have a foreign residency, commute to your Swiss employer on a daily basis (several work-related days of non-return excluded) and do not own an apartment in Switzerland.
Grenzgänger have to consider the possibility of several double tax treaties which Switzerland has concluded with its neighbor states (Germany, France, Austria, Principality of Liechtenstein, Italy).
For example a Swiss employer is obliged to withhold 4.5% of a German employee’s gross salary as Swiss source tax. This percentage may be claimed within the annual German tax return as a foreign tax credit. Wernli Tax Law Firm is also of service to file your tax return in all EU countries and others.
This special tax treatment as a “Grenzgänger” requires a tax residency confirmation which has to be applied for annually at your German tax office (so-called certificate of residence - Ger. Ansässigkeitsbescheinigung).
Weekly resident with a tax residency abroad – “Wochenaufenthalter ohne Ansässigkeit”
If you work in Switzerland on weekdays and commute to your foreign residency during weekends you may classify as an international „Wochenaufenthalter“. The taxation of said type of resident depends on the location of your family residency. If your family stays in their native country and you visit them regularly (at least two weekends per month), you are only limited tax-liable in Switzerland since your center of vital interests lies abroad.
Your Swiss employer reports and transfers the due income tax to the Swiss tax authorities. If you notice a deduction called “Quellensteuer” (source tax) on your salary payment sheets, you are most probably a Wochenaufenthalter.
The tax liability is fulfilled by the withheld source tax by your employer - no tax return can be filed, except you qualify as a Quasi-Resident. In some cases it is recommended to file a voluntary tax return so deductions for double household etc. can be claimed.
A special feature for Wochenaufenthalter with their family residency abroad results from the revision of the source tax directive which became effective on January 1, 2021. Thanks to this revision it is now possible for quasi-residents to file a voluntary tax return to claim further tax deductions (such as payments to the Swiss pension funds / Säule 3a, costs for the double household etc.).
You are entitled to file a voluntary tax return as a quasi-resident if at least 90% of your total income is tax-liable in Switzerland.
The deadline of March 31, 2022 has to be met and cannot be extended.
Wochenaufenthalter with a tax residency in Switzerland
In this scenario your family and you live together in Switzerland. Therefore your center of vital interests switches from your former home country to Switzerland. Thus far nothing has changed. Your Swiss employer withholds and transfers source tax from your wages to the tax authority.
If you are not an owner of a residence permit C (Niederlassungsbewilligung C), you are only obliged to file a Swiss tax return if your annual gross wage exceeds the amount of CHF 120.000, if you have income sources which do not underlie the source tax or if you are married to a Swiss national.