Tax in Switzerland?

[whattodo]

Hi,

I'm looking into the details of contracting in Switzerland, but i'm a bit short on tax facts when it comes to switching between countries. I've read about a "183 day" rule on days spent in the UK in a tax year but not sure of all the details. It's something like, if you spend at least 183 days in a tax year inside the UK then your earnings abroad are liable for extra UK tax (but not double taxation).

So say you worked a couple of contracts in the UK in one tax year taking you over 183 days since the start of the tax year, and you then work for say 11 months on contracts in Switzerland, before returning to the UK the following tax year. You spend more than 183 days in the UK in each of the two tax years. Would you pay Swiss tax on the Swiss contracts, but be liable for some UK tax on top of that? (making it not worthwhile taking them!)

I heard from another forum members comments that if you move out there permanently this rule doesn't apply. But what qualifies it as permanent? Is it a certain amount of time spent there? A certain visa / citizenship?

I'm guessing this has come up for some of you before. Better to know before doing it right?

[BlasterBates]

Although it is possible to work for a Swiss company temporarily and pay UK tax, this is only possible if you bill in the UK through a UK subsiduary, normally you´ll be paying Swiss tax. The norm is that you become Swiss tax resident, even if it´is for a short time. This is comparable if you were to take a permie job anywhere in Europe, when you pay tax from day one on PAYE, and thn quibble your tax in a form at the end of the year.

It is quite possible that you will be tax resident in both countries, and you´ll need to declare Swiss income in the UK and UK income in Switzerland.

Do not wory about this as under the double taxation treaty your income will not be taxed twice. If you are a temp employee in Switzerland this will not be taxed at all in the UK. Ony dividends and interest are taxed according to a credit. That means the authorities take into account tax you´ve paid. For employment income tax is completely exempt under the DTA.

It would be worth paying for some advice from an accountant just to check that they agree with the above.

I live in Germany and work in Switzerland and I declare my Swiss income in Germany and I pay no top-up tax at all. I´ve also delared UK income in Germany and again there was no top up tax, so I would expect that the Swiss-UK treaty is identical, certainly the wording is.

Some posters disagree with what I´ve said, but I have spoken to other contractors in Switzerland who agree with my opinion.

[stuent]

Hi whattodo - just wondering if you got any sensible advice about working in Switzerland.

I am considering a 6-9 month contract in Geneva and have been told today about being an employee in switzerland paying tax etc etc.

But having read some of the post in here and else where it appears there is a risk of paying tax in both UK and Switzerland as well as the expense issue!!!

all very confusing.

how did you get on? and how is the contract going in Switzerland?

Stuart

[BlasterBates]

Hi whattodo - just wondering if you got any sensible advice about working in Switzerland.

I am considering a 6-9 month contract in Geneva and have been told today about being an employee in switzerland paying tax etc etc.

But having read some of the post in here and else where it appears there is a risk of paying tax in both UK and Switzerland as well as the expense issue!!!

all very confusing.

how did you get on? and how is the contract going in Switzerland?

Stuart

As an employee your income will not be taxed in the UK. It is exempt under the DTA.

[JustMe]

Hi,
I am working at this moment in Switzerland. I am on the payroll of the agency for the duration of the contract (5 months). I receive a net-income (taxable at source).
Everything is expensive in Swiss, espec. Geneva area. So you rate should be high. At this moment the rates in Switzerland are also under pressure.

Calculation :
1000 chf / per day (42,5 hours week)
20 day work : 20000 chf month (employers part and employes
18373 chf month (employee gross income, 1500 fix expences)
13200 chf month (nett --> 21% tax Bern, maried)

[AlfredJPruffock]

It used to be the case that you had to have a degree for any IT contract in Switzerland - on that basis Bill Gates would never have worked in Switzerland.

Years ago I remember going to Hampden on a rainly evening - Scotland were 2-0 down at Half Time to Swtizerland - it was Charlie Nicholas debut.

Soaked and miserable on the terrace one Scotland fan did his best to lash out and insult the Swiss - the best he could muster was... 'Yer Chocolate's Rotten ! '

PS Nicholas and Dalglish both scored in the second half so the game ended 2-2.

[ASB]

It is exempt under the DTA.

I'm not convinced. I believe it is taxed at 0%. Though the effect is broadly the same. I believe it makes a difference with regard to benefits and similar things [If the income is actually exempted you could still retain entitlement to UK tax credits for example - event with a large swiss income].

I could be wrong of course, I've never had to resort to that particular treaty.

[BlasterBates]

I'm not convinced. I believe it is taxed at 0%. Though the effect is broadly the same. I believe it makes a difference with regard to benefits and similar things [If the income is actually exempted you could still retain entitlement to UK tax credits for example - event with a large swiss income].

I could be wrong of course, I've never had to resort to that particular treaty.

You need to declare it, but it won't be taxed directly. So yes you're right, "exempt" was a misleading term. It would affect rates of tax on other income and entitlements.