New source taxation law comes into effect in 2021 – Part 4
From 2021, the rules for source taxation in Switzerland will change; learn more about the key changes.
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On January 1, 2021, the new source taxation law comes into force. In the article series on the revision of source tax law, you will learn everything you need to know about the changes. The fourth part of the series explains the options for switching between source taxation and ordinary taxation.
On January 1, 2021, with the Federal Act on the Revision of the Source Taxation of Earned Income the new provisions on source taxation in Switzerland come into force. The details of the new regulation are recorded in Circular No. 45 by the ESTV to the cantonal tax authorities.
Change of Taxation
If certain circumstances change, it can happen that a person liable to withholding tax (employee) suddenly becomes subject to ordinary tax assessment or vice versa.
What is meant by «employee», «debtor of the taxable service» or «residence»? – Read the first part of the series.
Which employees are subject to withholding tax? – Read the second part of the series.
From Withholding Tax to Ordinary Assessment
A person liable to withholding tax who has residence in Switzerland is released from withholding tax i.e., newly assessed under ordinary procedures, when they:
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