Main tax domicile - Where are you liable for tax?

Tax law disputes between the cantons often stem from the question of an individual's personal affiliation. Conflict arises because it is not clear in which canton a person must pay taxes.

Disputes between the cantons recur because it is uncertain in which canton a person is liable for taxes. There are some principles that need to be considered when determining the primary tax domicile.

Legal Foundations

The tax domicile is located at the place where, according to objective, external circumstances, the center of the taxpayer's interests is determined. Once established, a domicile remains until the establishment of a new domicile. Establishing a domicile requires an external feature and an internal feature i.e., the intention of permanent residence. What does this mean? There are various factors that indicate the establishment of a domicile (mailing address, family & friends at the location, work activity at this location, etc.). For a domicile to be established, the tax-paying individual must, for example, have bought a house at this location (external feature) and they must also intend to live in this house (internal feature). If this is the case, then this house is the tax domicile of the person, even if they might also have a holiday home they visit from time to time. Thus, the tax domicile cannot be freely chosen.

Special Rules for Married Couples

A special regulation applies to spouses, as they are jointly taxed and therefore usually have a common tax domicile (Art. 9 Para. 1 DBG / Art. 3 Para. 3 StHG). Even if there are multiple residences, both spouses are taxed at the location to which they have the stronger connection. The problem is: if the taxpayers are still married but live separately in fact. In this case, the spouses are taxed separately. However, separate taxation assumes that the marriage is no longer being lived and that there are no communal relations between the partners anymore. This means the two are not living together, living costs are paid separately, and there are no joint accounts anymore.

Findea helps you keep your taxes simple and straightforward.

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