Switzerland: Revision of sources tax ordinance | KPMG | GLOBAL
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Switzerland: Proposed changes, tax withholding on Swiss employment income

Switzerland: Source tax withholding

A draft that would completely revise the federal withholding tax law (ordinance) has been submitted to the Swiss national parliament for consultation. The draft version would redefine the requirements for non-resident taxpayers subject to Swiss source tax withholdings on their Swiss employment income to benefit from the possibility of filing an “ordinary” tax return in Switzerland.


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It is expected that the changes would be effective in 2020.


The Swiss federal parliament on 16 December 2016 agreed to a complete revision of the federal withholding tax ordinance. The reform aims to reduce possible inequalities between foreigners subject to Swiss tax withholding and Swiss citizens or C-Permit holders who are not subject to the same tax regime.

Swiss tax residents as well as “quasi-tax residents”—defined as persons whose main residence is outside of Switzerland, but who earn the majority of their worldwide employment income in Switzerland—subject to Swiss source tax withholding could file a subsequent ordinary Swiss tax return. For persons subject to Swiss source tax withholding and who reside in Switzerland, filing a subsequent ordinary tax return has always been mandatory if they earned an annual gross income of CHF 120,000 or more from "dependent employment."


Read a September 2017 blog item posted by the KPMG member firm in Switzerland

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