– He performed substantial maintenance to the value of CHF 45 000 on his UK house, bought at CH 800 000 with a mortgage of CHF 550 000 at 4%, and rented it out at CHF 24 000 when he had to leave the country – He is divorced and pays an alimony of CHF 27K to his former spouse in the UK, who looks after his three children – He received a B permit, works in Geneva and lives in Vaud – A UK manager moved to Switzerland for a new position with a net salary of CHF 250 000 One (unfortunately common) example of the consequences of non-declaration is explored below: The result may be either additional tax, or overpaid tax that is reimbursed to you. The tax paid at source is deducted from the new tax burden. This means that you have to file a normal tax return, which will consider all of your other incomes and assets as well as your taxed-at-source salary. The declaration qualifies you as a «sourcier mixte». That means that the only the tax at source which your employer withheld and paid to the tax authorities is legally considered. When the deadline is reached, the tax at source assessment enters into force. Any declaration submitted after the deadline of the 31st of March will be refused, with countless potential consequences. By contrast, until mid-2012, the canton of Vaud sometimes accepted late declarations, even though the 31st of March was officially the deadline to announce taxable wealth and other incomes from the previous year.
In Geneva, for example, the deadline is linked to the date of the tax-at-source certificate given by the employer. It is, therefore, your responsibility to start the process on time. Some cantons may send you a form to determine whether you have to file a normal tax return or a simplified one, but some do not. Since it’s your obligation to declare the taxable wealth and other incomes unconnected to your Swiss employment, you have to ensure that you are fulfilling your obligation on time. Unless you have no taxable assets, your sole income is the Swiss salary already taxed at source, and your income does not exceed a certain level set by each canton, you must follow the obligation to declare your worldwide assets and ensure that you are in compliance with the law. After all, who would spontaneously, after landing in another country with a different language, look for a sentence lost in an abstruse tax code? Unfortunately, whether we accept it or not, “ignorance is no defence against the law”. Unfortunately, expatriates living in Switzerland usually overlook a crucial obligation that hides in a discreet Swiss tax article: the obligation to declare the other taxable elements of wealth and income beyond your Swiss salary. Tax at Source and International Sources of Income and Wealth All the elements of your worldwide wealth and income are taken into account under Swiss law to determine the applicable tax rate. This means that tax is paid according to one global economic capacity, regardless of both the source of the income and the localisation of the wealth. The Swiss tax system is based on the fundamental principle of a worldwide tax basis. Your employer ignores you other potential sources of income. Thus, the employer bases their tax calculations on your wages from working for them, makes provisions for child allowances (if any), and adjusts the amount according to different tables, depending on your situation: married, number of children, etcetera. The obligation to withhold tax at source belongs to the employer who, for privacy reasons, cannot know about any of your assets or other sources of income. Under Swiss tax law, B and L permit holders are normally taxed at source. When expatriates arrive to live in Switzerland because of a new job, they usually receive a B or L residency permit, at least in the case of EU citizens.
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