What are the latest changes to the tax at source (Quellensteuer)?

By transferring the tax liability to the employer, the state saves itself the examination and assessment according to the standard method ( which has led to a considerable saving in the budget) and has thus been able to introduce more favourable tax rates for newcomers. The purpose of introducing favourable tax rates was also to make it easier for newcomers to settle in (as is well known, costs are highest at the beginning of arrival in a new country) and thus to attract labour for the sought-after jobs. The tax authorities, not wanting to exclude newcomers from deductions such as 3rd pillar or additional costs related to income generation, made adjustments for those who wanted them. It got to the point where 50% of people started to apply for a tax return and fill out the return with an additional adjustment, which meant a double workload for the state apparatus that could no longer realistically be covered by the already reduced tax rates. It was therefore decided to amend the law, to standardise it (all cantons have the same accounting method) and to retain the preferential tax rates, which are based on an average of the allowable deductions. This measure is of course also intended to achieve savings in administrative costs. The following changes have been introduced: Settlement with the claimant canton. Prior to the change, an employer who settled the taxes of several employees at source could file a single tax return with his canton for all employees in total, according to the rates in the table assigned to his canton. The tax office of that canton would send the money internally to the employee's canton of residence. Change: Only the respective canton, i.e. the employee's canton of residence or weekly residence, may be used for the settlement. If employees live abroad and have no residence in Switzerland, the employer's canton is responsible in this case. No application of tariff code D. Employees with tariff code D additional work (mostly interest-bearing 10% ZH, AG 20% LU) receive the new tariff. The aforementioned tariff is no longer valid. Progression in case of several part-time jobs.

If a person liable to withholding tax who works for several employers earns substitute income in Switzerland or abroad (partial financing from the labour fund), in these cases the income relevant for determining the percentage (according to the applied tariff) is increased by the additional income to determine this percentage. If the employee is engaged in another gainful activity, he/she is obliged to inform the employer of this. There are various calculation options: -converting the periodic benefits into an effective total employment rate, -if the employee does not declare the total employment volume, the periodic benefits are converted to an employment level of 100%, - Conversion to actual total gross income, if the information is available, - If the workload cannot be determined, the relevant income can be calculated on the basis of the median salary of 5,676 Swiss francs per month (as at 1.1.2021), - a uniform rate applies to part-time employees who work by the hour or day without monthly remuneration. Tax return on a normal tax form (NOV). Now, persons who do not have a gross annual income of CHF 120,000 can also apply for a NOV. If you request this accounting method, the mandatory NOV will be kept until the end of the period of withholding tax liability. Once a request has been submitted, it cannot be withdrawn. Let's say a person who wants to file a normal tax return has been in Switzerland for three years and has noticed that she was able to deduct a lot of additional expenses last year. She applies for an NOV tax return. As long as she is subject to withholding tax (until the end of her B permit - in this case for 2 to 7 years), she is obliged to submit a complete NOV every year. Even if she does not have a large deduction in the years following the application and the tax return includes subsidies, she cannot revert to withholding tax. Please note that withholding tax is calculated at a preferential rate. Therefore, you should make the decision to switch to the NOV method carefully. From a withholding tax of Fr. 4,000, we may have to pay a total of Fr. 7,000 to the municipality, the canton and the state. If you do not know how to do a tax simulation and do not know whether you will make a profit or loss with this method, please contact us - tell us your situation and we will provide you with a calculation. In all NOV cases, the cut-off date rule now applies, i.e. the person liable to withholding tax is then assessed for the entire tax period in the canton in which he or she is domiciled or resident at the end of the tax year. Example: Anna lives in Baden AG until 15.04.2021 and moves to the city of Zurich on 16.04.2021. From 31.12.2021. (reference date) she is resident in Zurich and therefore liable for tax.

The tax return for the year 2021 must be submitted to the Zurich city administration. The ordinary tax assessment will be carried out by the Canton of Zurich for the entire tax period 2021. Therefore, neither the 2021 tax return nor a copy of the 2021 tax return already filed in Zurich should be submitted to the Canton of Aargau. Change of a rate adjustment for the recalculation of the withholding tax The previous rate adjustment is no longer valid. Recalculation of withholding tax can now be applied for until 31 March of the following year in the following cases, regardless of residence: - incorrect determination of gross remuneration, - incorrect determination of the tariff-determining income, - incorrect application of tax rates. No additional deductions are taken into account when recalculating the withholding tax. Changes that require a new rate classification (e.g. change in marital status, number of children, additional gainful employment, change of residence, etc.) are taken into account from the following month. Calculation models The calculation models will be standardised. Currently there is only one annual model (cantons of Fribourg, Geneva, Ticino, Vaud, Valais) and one monthly model (all other cantons). Change from withholding tax to ordinary taxation If a person liable to withholding tax receives a C settlement permit or marries a person with a Swiss passport or settlement permit, the liability to withholding tax ceases from the following month. The person is subject to regular accounting during the entire taxation period. Withholding taxes already paid are credited without interest.