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Taxation on the Source
What is Quellensteuer (source tax)?
You ar an employee living in Switzerland without the Swiss citizenship or without a swiss C residency permit (C-Niederlassungsausweis)? Then, your salary is subject to source taxation. Your employer will withheld source-tax on your salary payments, sec. 83 ff. of the Swiss Income Tax Act (Art. 83 DBG - Bundesgesetz über die Direkte Bundessteuer).
There are fixed rates depending on your marital status, religion and number of children. For some professions, the source tax might vary (such as members of the boards, sex worker, soccers, DJs).
Which payments are subject to source tax?
Subject to source tax are the salary payments of your employer, salary compensation allowances (such as unemployment and short-emplyoment allowances) and penion fund payments of the Swiss Rentenversicherungsanstalt (SVA).
Source tax rates
A: for single, divorced, judicially or de facto separated and widowed taxpayers
B: For spouses living in a legally or de facto unseparated marriage, for whom
only one spouse is employed
C: For spouses living in a legally and factually inseparable marriage for whom
both spouses are employed, even if this income is earned abroad
G: For substitute income that is not paid out via the employer (such as short
employment or unemployment allowances)
H: For single taxpayers (unmarried, divorced, separated and widowed) who live with
children or persons in need of support in the same household
L - Q: for German Grenzgänger
Due to the Swiss - German Double tax treaty (para 15a of the Treaty), Switzerland issues a soure tax of 4,5%
Grenzgänger are subject to source tax. Based on para 15a of the Swiss-German double tax treaty, the staty of tax residency is allowed to tax your salary (this is usually the state where you have your closer ties, vital interests as family, friends, hobbies). The state of work (this is where you perform your work) is able to raise a source tax of 4,5%.
For Germans commuting to Switzerland, this means:
Your Swiss employer withhelds 4,5% source tax. In Germany, you have to file an annual income tax return (we can help you here). Moreover, your German tax office issues quarterly tax prepayments. The Swiss taxes of 4,5% can be credited on your German income tax and reduce your German tax liability.
To underlie the rules of a Grenzgänger in Switzerland, a tax residency certificate is required. You must apply for it at your German tax office and file it at your Swiss emplyoer. The Gre-1 form is available at your foreign tax office or at the responsible Swiss source tax authority:
Cantonal tax authorities
Certificate of tax residency
German pecularity: non-commuting days
As a German Grenzgänger, there´s a maximum number of days which you are allowed to stay over in Switzerland (not applicable to France, Austria and Italy). In a year based on a full-time job (100%), you are allowed to have 60 days of non-commuting in Switzerland. Generally, a Grenzgänger must return to his foreign residency on a daily basis. There are
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