Residence taxation of natural persons

Case 1: Tax residence - unlimited tax liability

Topic 1: Pensioners on the move

Situation 1

The unmarried Hans Studer lived all his life in the city of Basel. He worked in the chemical industry and retired at the end of September 2016. At that time, he was still undecided where exactly he wanted to spend his retirement, but tended to leave Switzerland for good. At the end of November 2016, he will register abroad in writing with the residents' services of Basel-Stadt. He rented a motorhome for a long time and began to travel the world. On 31.12.2016 he was on a camping site near Oslo. He kept the apartment in Basel-Stadt, a small 2-room apartment, for the time being.

Questions:

1. Where is Mr. Studer's tax residence at the end of 2016?
2. What conditions apply to the transfer of tax residence abroad?

Situation 2

In the event that the situation 1 remains otherwise unchanged, Mr. Studer will terminate the lease for mid-December 2016.

Questions:

What changes would occur in terms of tax residence?

Topic 2: Tax residence - weekly residents

Situation 1

Thomas Keller was born in 1965. He is single and has been a full-time lecturer at the University of Applied Sciences in Basel-Stadt since 2007. Since his employment at the University of Applied Sciences, he lives in a 2.5-room apartment in Basel-Stadt. The apartment contains a separate kitchen and he has furnished the whole apartment with his own furniture. His employment level is 80%. During the semester he stays in Basel-Stadt 4 days a week. He spends the long weekends and free time in St. Gallen. Thomas Keller grew up in St. Gallen. He studied in St. Gallen. He continues to maintain his circle of friends there and he is on the board of the Heimatschutzverein. In St. Gallen he lives in a 4-room apartment in the house (spacious single-family house) of his elderly parents. In the canton of Basel-Stadt, he has registered as a weekly resident.

Questions:

1. Where is the tax residence of Thomas Keller in 2017?
2. From a tax perspective, will Mr Keller be a weekly resident in 2017?

Topic 3: Tax residence - official assessment and AIA

Situation 1

Helmut Bauer was resident in Birsfelden (Canton Baselland) until July 2017. In the city of Basel (canton of Basel-Stadt) he has been running a small restaurant on Baslerplatz 2 since 2012, and as of 31 July 2017 Helmut Bauer registered with the residents' services of the municipality of Birsfelden in the canton of Baselland. As place of departure he gave Baslerplatz 2 in Basel-Stadt. He did not register with the residents' services of Basel-Stadt. On 30 September 2018 he married Brigitte Heinemann, who has lived for many years at Basiliskweg 5 in Basel-Stadt. On 30 January 2019, he spoke to the residents' services of Basel-Stadt and reported his move to his wife at Basiliskweg 5 as of 30 January 2019.

In 2018, the tax administration of Basel-Stadt was informed by the automatic exchange of information (AIA) that Helmut Bauer has bank accounts in Germany with a capital of EURO 300'000 in his name. The address is Basiliskweg 5, and from then on the Basel City Tax Administration sent Helmut Bauer a 2018 tax return as of 15 February 2019. In the absence of a tax return, the tax administration made an official assessment. In the 2018 tax assessment decree, the restaurant's profit and the wife's income were assessed and the joint assets were estimated at CHF 400,000. No objections were raised within the time limit.

One month after the expiry of the objection period, Helmut Bauer contacted the tax authorities and claimed that the official assessment was invalid. In 2018 he would not have been in Basel-Stadt. The restaurant would have been handed over to Peter Neuer on 30 November 2017. He enclosed a sublease agreement with Peter Neuer from 30 November 2017 and a confirmation of registration from the Mayor's Office in Lörrach (Germany) as of 12 March 2018. No rental agreements etc. were submitted. Investigations by the tax administration show that Peter Neuer never took up self-employment. According to the commercial register, the restaurant was continued by Martin Schmitt as of 1 February 2019.

Questions:

1. Where is the tax residence of Helmut Bauer?
2. What are the tax obligations?
3. Does the tax administration have to check the tax liability retrospectively in the case of an existing legally binding order?

Subject 4: Tax residence - secondment

Situation 1

Lukas Meier is 30 years old. He is single and lives in a condominium in Basel-Stadt. His parents also own a condominium in the same house. Professionally, he works in the chemical industry as a research chemist. His employer makes him an offer that he can move to the subsidiary in Kiel (Germany) for about four years for a current research project. In August 2018, he will register with the residents' services of Basel-Stadt in Kiel.

Questions:

1. Where will Lukas Meier's tax residence be when he sells his condominium in Basel-Stadt in October 2018? Does he then still have a tax liability in Basel-Stadt?
2. Where is the tax residence of Lukas Meier if he does not sell his apartment in Basel-Stadt? Does he then still have a tax liability in Basel-Stadt?
3. Where would Lukas Meier's tax residence be if he were married and his wife and child remained in Basel-Stadt? Would he still be liable for tax in Basel-Stadt?

Case 2: Secondary tax liability

Theme 5: Secondary tax liability due to self-employment

Situation 1

Markus Deutscher lives in Schopfheim (Germany) not far from the Swiss border. He is self-employed and runs a small sanitary company in Schopfheim with three employees. As a hobby he is active in a Basel carnival clique and has thus built up a large circle of friends and acquaintances in Switzerland. As a result, it has recently emerged that he is now frequently asked to carry out sanitary work in Switzerland as well. He now decides to accept an assignment for a Swiss client who lives in Basel City. The job should take him two to three days.

Questions:

At which domiciles is Markus Deutscher taxable and in which form?

Situation 2

As a supplement to Facts 1, Markus Deutscher is asked whether he would like to operate a catering stand on St. Peter's Square during the autumn fair in Basel City for around 2 weeks. Markus Deutscher does this with pleasure and makes a profit of CHF 6'000 in these two weeks.

Questions:

In which tax domicile must this profit be taxed?

Situation 3

As a supplement to Situation 1, orders in Switzerland are increasing. Markus Deutscher accepts an order in Aesch (canton BL / Switzerland) in connection with a large new building. He will be very busy there for six weeks and rents an apartment in Aesch in an apartment building for this time.

Questions:

At which domiciles is Markus Deutscher taxable and in which form?

Situation 4

As a supplement to Fact 1, Markus Deutscher is becoming increasingly well known in Switzerland. A colleague asks him if he could help him out with an employee, as one of his employees is currently on maternity leave and the job would otherwise get out of hand. Markus Deutscher agrees. For four months he rejects an employee. He works in Zurich, but remains employed by Markus Deutscher and receives his salary from him. In Zurich he works under the instructions of the local authorities and lives in a boarding house. The colleague pays Markus Deutscher his salary as well as a contribution towards expenses of 5 percent.

Questions:

Will Markus Deutscher be taxable in Switzerland?

Situation 5

As a supplement to Situation 1, Markus Deutscher receives more and more orders in Switzerland. He permanently rents a double garage in Basel-Stadt, where he stores toilets, washbasins, tools and other sanitary material.

Questions:

Will Markus Deutscher be taxable in Switzerland?

Situation 6

As a supplement to situation 5, the double garage will soon no longer suffice. Many Swiss customers want to be able to look at the sanitary items such as washbasins etc. and the journey to Schopfheim is too far for them. Markus Deutscher rents a showroom in the Dreispitzareal in Basel, where he exhibits sanitary items.

Questions:

Will Markus Deutscher be taxable in Switzerland?

Situation 7

As a supplement to Situation 1, Markus Deutscher is taking over the sanitary work in a relatively large development in Basel City. Initially, a permanent work performance of 11 months is planned. But soon it turns out that this will never be enough and Markus Deutscher will work permanently on the superstructure for about 15 months.

Questions:

Will Markus Deutscher be taxable in Switzerland?

Topic 6: Secondary tax liability due to property acquisition

Situation 1

Melanie Kaufmann is Swiss and has lived in Vienna (Austria) in a 5-room apartment for many years. She is single and works as a doctor in a hospital. On 31 May 2018 her aunt and godmother Rösli Kaufmann died childless. Rösli Kaufmann leaves Melanie Kaufmann bank accounts amounting to CHF 100,000 and an apartment building in Basel-Stadt, where she also lived. Melanie Kaufmann wants to keep the apartment building.

Questions:

At which places is Melanie Kaufmann liable to tax from when and how?

Situation 2

In addition to case 1, Melanie Kaufmann has already owned a chalet in Grindelwald (Switzerland) since 2010. She only stays there on vacation. She does not rent the chalet and does not intend to sell it.

Questions:

1. At which places is Melanie Kaufmann liable to tax from when and how?
2. Which canton will be taxing?

Situation 3

As a supplement to Situation 2, Melanie Kaufmann is not single but has been married for five years. She lives together with her husband in Vienna. The chalet in Grindelwald is solely owned by Melanie Kaufmann.

Questions:

Is Melanie Kaufmann taxed as an individual or is her husband also taxable in Switzerland?

Case 3: (International) weekly stay/cross-border commuter

Basic facts: X is married and lives with his family in Germany (Hamburg). He works as an accountant at Farben AG in Oberrieden ZH. During the week he lives in a 2-room apartment in Zug and flies back to Hamburg on weekends on the shelf.

Question 1: Where is he/she resident or how and where is his/her income from employment taxed?

Question 2: Does his taxation change after he is promoted to head of department?

Question 3: What would the taxation be like if the family lives in Konstanz and X returns to Konstanz in the evening by a large majority; does it matter if he is head of department?

Variant 1: like basic facts, but the family lives in London

Question 1: Taxation in case of regular return at the weekend?

Question 2: How is the taxation carried out if X returns to the family only 1-2 weekends per month?

Option 2: X is married and lives with his family in Baar. He works as a manager at Pharma AG in Basel. During the week she lives in a 2-room apartment in Basel and spends the weekend with her family in Baar.

Question 1: Where is his earned income taxed?

Question 2: As a manager, he runs a global department of over 1000 employees; as a rule, he spends 3 nights abroad, 2 nights in his Basel apartment and 2 nights in his family home in Baar per week; what could the taxation look like here?

Case 4: International week stay/quasian residence

Basic facts: X is married and lives with her family in Paris. She works as CFO at the Hallo Group in ZH. During the week, she lives in an apartment close to her place of work and usually flies back to Paris at weekends. Her husband is 100% gainfully employed in Paris.

Question 1: Can X file a tax return?

Question 2: What other deductions can it claim apart from the foreign working days deducted?

Question 3: Is a possible securities asset of EUR 1 million relevant?

Question 4: What is the prerequisite for so-called quasianism according to federal court rulings? How is the limit value determined? How is a quasi-resident taxed?

Question 5: What other deductions can be made if X does not qualify as a quasi-resident?

Variant (year 2021): X is married and lives with her family in Paris. She works as CFO at the internationally active Hallo Group in ZH. It has about 30 third country working days. During the week, she lives in an apartment close to her place of work and usually flies back to Paris at weekends.

Question 1: How can X ensure that she can file a tax return?

Question 2: Would X qualify as a quasi-resident in this case?

Question 3: If you do not qualify as a quasi-resident, will a purchase in the pension fund be lost?