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Switzerland salary for non-resident tax question (quellensteuer)

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hlepic211

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Dec 23, 2020
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#1
Does anyone know the amount of tax a Swiss company incorporated in Zug has to pay for an employee resident in another EU country (remote worker)? I found out that it's called "quellensteuer" (withholding tax), but every calculator I've tried only works for residents. Maybe someone can help calculate (let's say 8000 CHF per month) or provide a link for a proper Zug tax calc?
Is this quellensteuer has to be paid monthly? Also I found that if the salary exceeds 120,000 CHF per year the employee has to file a tax declaration in Switzerland even if he's not a resident, can someone confirm?
 
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#2
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#3
hlepic211 said:
Does anyone know the amount of tax a Swiss company incorporated in Zug has to pay for an employee resident in another EU country (remote worker)? I found out that it's called "quellensteuer" (withholding tax), but every calculator I've tried only works for residents. Maybe someone can help calculate (let's say 8000 CHF per month) or provide a link for a proper Zug tax calc?
Is this quellensteuer has to be paid monthly? Also I found that if the salary exceeds 120,000 CHF per year the employee has to file a tax declaration in Switzerland even if he's not a resident, can someone confirm?
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As long as the nationality of the employee in question is unknown, not even the Kantonales Steueramt will be able to give you a satisfying answer. Reason: There are different agreements in place for
  • les frontaliere de la Grand Nation
  • i lavoratori frontalieri del Bel Paese
  • die Grenzgaenger Preussens
To give you an example -> Nuove regole per i frontalieri Italia – Svizzera

Furthermore, from a Swiss perspective, the requirement for filing a tax return after exceeding a certain income mainly has to do with the fact that "Vermoegenssteuer" is due. It is more of a control check since Frontaliere/Frontalieri/Grenzgaenger rarely have any other possession (real estate etc.) in Switzerland.

Do yourself a favour and call up the "Kantonales Steueramt" with proper details (nationality and residency of employee + exact income) and they will be able to instruct you accordingly.
 
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#4
1234567890 said:
As long as the nationality of the employee in question is unknown, not even the Kantonales Steueramt will be able to give you a satisfying answer. Reason: There are different agreements in place for
  • les frontaliere de la Grand Nation
  • i lavoratori frontalieri del Bel Paese
  • die Grenzgaenger Preussens
To give you an example -> Nuove regole per i frontalieri Italia – Svizzera

Furthermore, from a Swiss perspective, the requirement for filing a tax return after exceeding a certain income mainly has to do with the fact that "Vermoegenssteuer" is due. It is more of a control check since Frontaliere/Frontalieri/Grenzgaenger rarely have any other possession (real estate etc.) in Switzerland.

Do yourself a favour and call up the "Kantonales Steueramt" with proper details (nationality and residency of employee + exact income) and they will be able to instruct you accordingly.
Click to expand...
Thanks, just sent them an e-mail.

The nationality of the worker is Lithuanian, he is a tax resident of his home country. He's going to work remotely as a software dev. 8000 CHF/monthly but we still have to figure out the taxes.
 
#5
hlepic211 said:
Thanks, just sent them an e-mail.

The nationality of the worker is Lithuanian, he is a tax resident of his home country. He's going to work remotely as a software dev. 8000 CHF/monthly but we still have to figure out the taxes.
Click to expand...
Interesting, since a Lithuanian with tax residency in Lithuania is not a typical Frontaliere/Frontalieri/Grenzgaenger.
However, since he is a full-time employee I am sure they will apply the same tax rules with regards to "Quellensteuer".
Be aware that social security contributions (AHV/IV and SUVA) are due in any case.
 
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#6
While it's technically possible to have non-resident employees, it is much more common for those people to be service providers instead of employees. The only common exception are jurisdictions with significant cross-border workers (like Switzerland and its neighbors), where there are usually tax agreements in place that you can leverage.

A service provider is normally paid without any taxes paid by the company ("employer", which is the service provider's client), and it is the service provider's duty to pay all due taxes where they are based. In some cases (subject to local tax law), you can reduce your overall tax burden if you set up a company which acts as the service provider for the Swiss company and which then pays you dividends.
 
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#7
Sols said:
While it's technically possible to have non-resident employees, it is much more common for those people to be service providers instead of employees. The only common exception are jurisdictions with significant cross-border workers (like Switzerland and its neighbors), where there are usually tax agreements in place that you can leverage.

A service provider is normally paid without any taxes paid by the company ("employer", which is the service provider's client), and it is the service provider's duty to pay all due taxes where they are based. In some cases (subject to local tax law), you can reduce your overall tax burden if you set up a company which acts as the service provider for the Swiss company and which then pays you dividends.
Click to expand...
That would be the normal way to do it.
However, @hlepic211 wants info about employee taxation.
Perhaps the employee was clever enough to have asked for this set-up because that way he can benefit from AHV/IV, SUVA and Pensionskasse coo-:!y
 
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#8
1234567890 said:
That would be the normal way to do it.
However, @hlepic211 wants info about employee taxation.
Perhaps the employee was clever enough to have asked for this set-up because that way he can benefit from AHV/IV, SUVA and Pensionskasse coo-:!y
Click to expand...
Yes this is also the case
+ Now we pay a lot because he's hired under a company in Estonia, it makes more sense to transfer him to Switzerland. Basically for him to get 8k the company has to pay around 13k now. I assume the costs will be way less for the Swiss company (more or less 10%?).
And there are DTA agreements in place so the salary would not be taxed in his home country.
 
#9
hlepic211 said:
And there are DTA agreements in place so the salary would not be taxed in his home country.
Click to expand...
Oh yes he will be taxed where he is resident, regardless of where the employer is based. In Switzerland you have to distinguish what are social contributions (AHV/IV, SUVA, Pensionskasse), which are due also by foreign residents employed by a Swiss company, from actual taxes, these will not be payable in Switzerland in case he continues to live abroad. Different rules are in place with countries bordering with Switzerland.
 
#10
If one is not employed in his own Swiss company, how much of all of this does he has to pay?

And does all this apply if I own a Swiss company, employed there but don't live in Switzerland?
 
#11
You could maybe hire him trough a company/service like remote.com, deel.com etc.
This way he's not your employee - he's a bill you're paying... (I might be wrong here but check this in more detail).
 
#12
I've received response from the Zug tax agency and they basically said that if the works remotely then no, but if he works locally from Switzerland from time to time (let's say 1-3 months/year) then the employer has to pay the "Quellensteuer". If you're visa free within the EU there's low probability they'll will check, so if you need your salary taxed somewhere I think it might work. This might be useful for those with Portugal NHR status, you then won't have to pay the 20% tax locally because it was taxed in Switzerland (at a lower rate), if I understand this correctly.

JimBeam said:
You could maybe hire him trough a company/service like remote.com, deel.com etc.
This way he's not your employee - he's a bill you're paying... (I might be wrong here but check this in more detail).
Click to expand...
Great idea. But this then depends on where the employee is a tax resident because he will be subject to income tax when he received payments from these platforms.
 
#13
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#14
#15
James Spader said:
how would you use this tool?
Click to expand...
TBH I have not used it but I have some plans to use it in the future.

Basically trough them you could hire freelancers that live outside your country and they are not employed by your company than by their local company. All employees taxes, salary and contributions paid where they live and they will be legally employed in their home country (while actually performing work for your company). On the other hand, for your company a hired freelancer would become just a bill from this company.
 
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