Employer's obligations in the withholding tax procedure

Especially for foreigners working in Switzerland, the source tax procedure is applied. Many find this process favorable as it is less cumbersome than the ordinary tax procedure. For employers, however, the source tax procedure involves additional effort.

Source Tax Calculation

‍Central to the employer's obligations in the source tax procedure is Art. 88 of the Federal Act on Direct Federal Tax (DBG) (for an overview, see the article "The Source Tax"). Accordingly, the employer is required to deduct the source tax directly from the employee's gross salary every month and deliver it to the relevant tax authority. They must settle accounts with the tax authority and allow it to inspect all documents for the control of tax collection (Art. 88 para. 1 lit. c DBG). This represents additional effort for the employer. In the source tax procedure, the employer is the debtor of the taxable benefit. Consequently, they are also liable for these taxes (Art. 88 para. 3 DBG). In addition, the employer must register the taxable employee with the authorities using the designated form within eight days of starting work.

‍Certification Obligation

‍As with the ordinary tax procedure, the employer must provide their employees with an official salary certificate. If such a certificate is knowingly filled out incorrectly, significant consequences threaten the employer. The deduction must be visible and confirmed on the salary certificate for persons subject to the source tax (Art. 88 para. 1 lit. b DBG).Findea helps you keep your taxes simple and hassle-free.

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