Paying Swiss taxes: What expats need to know

The season for filing Swiss tax returns has begun once again. As an expat, you may be eligible for different types of taxation, which are summarised below. Each tax type imposes various different requirements based on where you live. Wernli Tax Law Firm offers support to help comply with these tax obligations and advises expats on whether a voluntary tax return may be recommended or not.

Expat taxes for cross-border commuters (Grenzgänger)

You may qualify as a Grenzgänger if you live outside of Switzerland and commute to a Swiss job on a daily basis. Grenzgänger have to consider the possibility of several double tax treaties which Switzerland has with its neighbours (Germany, France, Austria, Liechtenstein, Italy).

For example, a Swiss employer is obliged to withhold 4,5 percent 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 able to file your tax return in all EU countries and many 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, which is usually called a certificate of residence (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." Taxes for this type of resident depends on the location of your family home. If your family stays outside Switzerland and you visit them regularly (at least two weekends per month), you are only limitedly tax-liable in Switzerland since your “centre of vital interests” lies abroad.

Wernli Tax Law Firm is able to file your taxes in all EU countries and many others.

Your Swiss employer will report and transfer income tax to the Swiss tax authorities for you. If you notice a deduction called Quellensteuer (or source tax) on your salary payment sheets, you are most probably a Wochenaufenthalter.

Quasi-Resident of Switzerland

A special feature for Wochenaufenthalter with their family residency abroad is a revision of the source tax directive which became active 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), which Wernli Tax Law Firm can help you with.

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, you and your family live together in Switzerland. Therefore your centre of vital interests switches 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 C or settlement residence permit (Niederlassungsbewilligung C), you are only obliged to file a Swiss tax return if your annual gross wage exceeds 120.000 Swiss francs, you have income sources that are not included as part of the source tax or you are married to a Swiss national.

Wernli Steuerberatung is a Swiss tax law firm, located in the city of Aarau. They provide expat-friendly tax services for people in Switzerland and nations around Europe. If you need to file a tax return, have international tax obligations or need advice on social security, Wernli Tax Law Firm is here to help.