Ask Albatross

by Alex Clarke

March 11, 2024

Disclaimer: At Albatross, we're your expert accountants, demystifying the labyrinth of taxes without the jargon. But remember, the info here may not be a one-size-fits-all for your situation. Reach out to us for the latest tailored advice.

Personal Taxes – Arriving in Switzerland (from a tax perspective)

So, you've landed in beautiful Switzerland, ready to conquer both life and taxes. This section is your guide to understanding the tax journey that awaits.

Who's in the Hot Seat? (Hint: B Permit Holders)

This guide caters to those with a B permit, provided through your employer. Once you touch down in Canton Vaud, notifying your commune kickstarts the tax adventure.

Depending on several criteria, you may be subject to withholding tax or obligated to file a Swiss tax return as you would if you were a Swiss tax citizen or C permit.

Helpful Hint: Withholding tax = your employer takes your tax off your monthly pay slip

As a general rule, in Switzerland, your global assets and revenue need to be declared for personal and wealth tax purposes. Your foreign assets and revenue will either be taxed in CH or included just for the tax rate. But don't fret, we're here to simplify things.

Is This Article Applicable to You?

Before we dive in, let's figure out who you are in this tax tale:

  • Person A: Over the threshold – applies to you, and you have to file.
  • Person B: Doesn't apply to you, and you don't have to file.
  • Person C: Doesn't apply, but you can opt-in voluntarily.

Make sure to note this is Canton Vaud territory. To see if you're subject to filing a Swiss tax return in Canton Vaud, check out these criteria:

  • The gross annual income of the taxpayer or his/her spouse, who live in a common household, exceeds the amount of 120,000 francs gross a year

Helpful Hint: your monthly gross salary is indicated on your employment contract

  • the taxpayer receives other income that is not subject to withholding tax (widower's pension, income from self-employment, real estate income, etc.)
  • the taxpayer has assets in CH or abroad that exceed the wealth tax entry threshold.

Proactive Tax Strategies: Get Ahead of the Game

Spot yourself in the criteria? Feel free to contact us – we’d love to review your situation. Ignorance isn't bliss, especially when it comes to tax laws.

Here’s a scenario we often see:

Imagine you've got a property in Spain, soaking up that Spanish sun off the Swiss tax radar. But when you decide to sell the house and cash in and bring the funds home, the tax folks start playing detective. They want to know where the sudden wealth boost came from – cue the awkward reveal of your secret Spanish asset.

Deadlines & Exceptions: March to Your Tax Beat – Unmasking the Right Category

Person A & C – Mandatory or Unmandatory but Want to Do It Voluntarily

If Person A's situation applies to you, you may receive a tax return automatically or need to notify the tax authority by March 31 of the previous fiscal year (31.03.24 for 2023) depending on which criteria apply to your individual situation.

If Person B's situation does not apply, and if Person C wants to dive into the tax return game voluntarily, notify the tax authority before March 31 of the previous fiscal year (31.03.24 for 2023).

Exceptions? Sure, if you work for an international organization or live outside Switzerland, you get a hall pass or different rules may apply. If you have a C permit or are a Swiss national, the above does not apply to you; you will need to file a Swiss tax return (mandatory).

To File or Not to File? That Is the Question – Person B – Not Mandatory

Swiss tax return not mandatory for Person B? It could still be interesting for you to switch to normal filing and claim more deductions. Dive into potential savings if you've got nanny bills, retirement investments, or high transport costs.

Important: Once you file, there's no going back to the withholding tax scale. Choose wisely!

Wrapping Up Your Tax Journey

In a nutshell, filing a Swiss tax return depends on your unique scenario. Avoid the retroactive tax bill by staying informed. And if you're not subject to filing a Swiss tax return (currently taxed at source), get in touch so we can chat about maximizing those annual tax savings. Your financial future will thank you.

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