Novelties in the Swiss tax at source

Companies, as employers who are liable for the payment of the tax, must take the following into account:

The Swiss Federal Legislator has partially revised the source tax law, by which there can be changes for companies concerning the correct declaration and payment of tax at source. As of 01 January 2021, a subsequent statutory assessment (SSA) can be requested for all in-Switzerland residing, source-taxable persons. This is obligatory for taxable persons with a yearly income above CHF 120,000.00.

Below that, an SSA can be requested. Furthermore, foreign residents who earn 90% or more of their income in Switzerland shall henceforth be treated equally in comparison with Swiss residents. Persons living in foreign countries and meeting the requirements of this virtual residency, can request an SSA on a yearly basis as well. The new Circular no. 45 of the Swiss Federal Tax Administration (FTA) specifies how an employer must calculate the taxable days of foreign residents. In addition to that, there are a few changes in the territorial jurisdiction: The canton in which the tax at source must be declared and paid can differ from the previous one (!). Thus, the applicable tax rates can vary.

For part-time employees, weekly residents and staff leasing employees there are extra rules. According to the new Circular, employers who do not meet the deadline for the declaration in the correct jurisdiction can lose their claim to the entitlement provision. It is advisable for every employer to check the monthly and yearly source tax declaration in accordance with the new regulations. Companies that employ persons who are taxable at source are encouraged to check whether the assessment falls under a new jurisdiction to avoid back payments, arrears and fines.

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