Withholding taxes

Case 1: Subsequent ordinary assessment for non-residents

1. facts of the case

Julia Müller is employed by the internationally active N AG Group. In 2023, she worked for the German Group company in Stuttgart (D). Since January 1, 2024, she has been employed by the Swiss sister company based in the city of Bern. Her gross salary is CHF 500,000 and she will also receive a bonus of CHF 50,000 in June 2024 for her work at the German Group company. Ms. Müller is not an executive employee.

Mrs. Müller lives in Germany with her husband and their child in a detached house in Grenzach-Wyhlen. As a rule, Mrs. Müller returns to her place of residence, around 100 km away, every day after work. She works from her home office in Grenzach-Wyhlen every second Friday (24 days p.a.). Furthermore, she is unable to return to her place of residence on 70 days in 2024 for professional reasons. The non-return days are worked in Switzerland.

Mrs. Müller's husband works for the German company V AG with offices in Villingen-Schwenningen (Germany). He earns a gross salary of the equivalent of CHF 50,000. The family does not belong to a national church.

In addition to the dependent earned income, the Müller spouses earn CHF 10,000 from securities in 2024. The imputed rental value (calculated in accordance with Swiss tax law) for the house in Grenzach-Wyhlen is CHF 25,000.

In 2024, Ms. Müller made a purchase into the 2nd pillar in the amount of CHF 50,000 and made a pillar 3a contribution of CHF 7,000. Her travel costs amounted to CHF 20,000 and childcare costs to CHF 10,000.

Questions

• What procedure is used for taxation in Switzerland?
• What income is Ms. Müller liable to pay tax on in Switzerland?
• How is the tax levied and calculated?
• Which withholding tax rate is applicable?
• How much withholding tax is owed?
• Under what conditions can Mrs. Müller apply for a retrospective ordinary assessment? Have the requirements been met in this case?
• Ms. Müller finds it offensive that deductions may fall into the void. She therefore invokes Art. 99b DBG as an alternative. Is a subsequent ordinary assessment to be made ex officio?
• Mrs. Müller claims subventually that she should be reimbursed for the purchase made in the 2nd pillar and the pillar 3a contribution if she is denied the deduction as part of a subsequent ordinary assessment. Can her sub-appeal be approved?
• variant:

Mrs. Müller lives with her family in Paris (France) and only returns to her French residence at the weekend. During the week, she lives in a two-room apartment in the city of Bern. She is unable to work from home due to her duties. The rent amounts to CHF 10,000 per year. Please refer to the basic facts for the other elements of the case. How is Ms. Müller taxed in Switzerland and are the requirements for retrospective ordinary assessment fulfilled?

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Case 2: Subsequent ordinary assessment, UK residence

1. facts of the case

Ms. Smith is employed locally by a company in Zurich as of January 1, 2025. Ms. Smith's family will remain resident in London and she will return to the family on a regular basis. Ms. Smith does not qualify as a resident in the UK based on the days spent in the UK. Ms. Smith travels a lot for work and spends approximately 130 working days outside the UK or Switzerland. In Switzerland, Ms. Smith rents an apartment in Zug.

Questions

• How is Ms. Smith taxed in Switzerland?
• Can a tax return be submitted in Switzerland?
• Where are the third country days taxed?
• What other risks do you see?

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Case 3: Executive employee resident in Germany

1. facts of the case

Tim Bieri is a Swiss national resident in Munich (Germany). He lives in Munich together with his husband and their two children. Mr. Bieri is the managing director of IT AG based in the city of St. Gallen and earns a gross annual salary of CHF 300,000 in 2025. Mr. Bieri works three days a week in the offices of IT AG in St. Gallen and the remaining two days in his home office in Munich. He spends the nights from Monday to Tuesday and from Tuesday to Wednesday in a hotel in St. Gallen.

Questions

• What procedure is used for taxation in Switzerland?

• What income does Switzerland have the right to tax?

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Case 4: Recalculation and elimination of days abroad

1. facts of the case

Eva Schmid lives in Berlin (Germany) with her cohabiting partner and her son from a previous relationship. She works in marketing for an international company in the healthcare sector based in the city of Basel. She works from her home office in Germany every other week. For the weeks in which she works in Basel, the employer provides her with a company apartment. Her gross annual salary for the 2024 tax year is CHF 150,000.

The competent German tax office taxes the working days performed in Germany in the 2024 tax year. This results in international double taxation for the working days not performed in Switzerland in 2024. Immediately after receiving the German tax assessment notice in May 2025, Ms. Schmid contacts the tax administration of the Canton of Basel-Stadt and applies for a refund of the withholding tax levied in Switzerland to the extent of the double taxation. She is also bothered by the fact that she pays taxes in two countries and then has to reclaim them. For liquidity reasons, it would like to pay only the tax owed in both countries directly.

Questions

• What income does Switzerland or the Canton of Basel-Stadt have the right to tax?
• For future years, can Ms. Schmid ensure that Switzerland only taxes the working days for which it has the right of taxation from the outset?
• What calculation methods exist for calculating the elimination of days abroad?
• On the basis of which provision and within which deadline can Ms. Schmid apply for a refund of withholding tax for the 2024 tax year?
• What happens if Mrs. Schmid misses the deadline for submitting the refund application? Are there any (further) options for eliminating international double taxation?

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Case 5: Cross-border commuter Germany

1. facts of the case

Mr. Meier lives with his family in Singen (DE). Mr. Meier signs an employment contract with a company based in Zurich and starts work on January 1, 2024. Due to his role, Mr. Meier travels a lot (a total of 50 travel days per year). In addition, Mr. Meier works 4 days per month in his home office in Germany (48 days per year).

In April of the following year, the Müller family moves from Singen to Freiburg im Breisgau (152 kilometers each way) for personal reasons.

Questions

• Does Mr. Meier qualify as a cross-border commuter?
• If so, what documents are required and how is taxation carried out in Switzerland?
• Do travel days and home office days have an impact on taxation?
• Can Mr. Meier file a tax return in Switzerland?
• Does the change of domicile have an impact on taxation in Switzerland?

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Case 6: Cross-border commuter France

1. facts of the case

Ms. Koller lives with her family in France. On January 1, 2024, she will take up a job with a company in Basel. She returns to the family home in France every evening (distance between home and work is 90 kilometers each way). It is agreed that Ms. Koller will work from home one day a week (48 working days per year). In addition, Ms. Koller has 10 business trips per year (5 days in France and 5 days in third countries). She also has to be on call 40 days a year and therefore does not return to her place of residence in the evening.

Ms. Koller would like to spend more time with her family and, in consultation with HR, the number of home office days will be increased to a total of 120 days per year from the following year. In addition, Ms. Koller still has 10 business trips per year and has to be on call 40 days a year.

Questions

• Does Ms. Koller qualify as a cross-border commuter?
• How is taxation carried out in Switzerland?
• How are home office days / travel days and on-call duty taxed in Switzerland?
• Can a tax return be submitted in Switzerland?
• Does the increase in home office days have an impact on taxation in Switzerland?