Expat Tax in Switzerland

/by

Senior executives and specialists with special professional qualifications who are temporarily posted to Switzerland by their foreign employer (expatriates) can pay direct federal tax in addition to professional costs according to the Swiss Professional Costs Regulation.

A temporary employment is considered to be temporary for a maximum period of five years.

The deductibility of special professional costs ends in any case if the fixed-term is replaced by permanent employment.

Deductible Special professional costs:

 For expatriates residing abroad

  • The necessary costs for travel between foreign residence and Switzerland
  • The reasonable housing costs in Switzerland if retention of an apartment constantly available for personal use abroad

 For expatriates residing in Switzerland:

  • The necessary costs for moving to Switzerland and back to the former foreign country of residence, as well as the necessary return costs for the expatriate and his family at the beginning and end of the employment relationship
  • The reasonable housing costs in Switzerland if maintaining a permanent home abroad available for personal use
  • The cost of teaching underage foreign-language children at foreign-language private schools, provided that public schools do not offer tuition in their language

Recommendation: The Swiss law doesn’t specify the maximum for a “reasonable” housing and other costs, then everything above has to be taxed. Each canton has a different measurement and we recommend to clarify it in the canton where the person takes domicile or stays in a hotel, intermediate apartment etc..

Please don’t hesitate to contact International HR Services Ltd. if you have further questions to this subject.