Tax liability for foreigners at source

Withholding tax is a tax that is not deducted by the employee, but directly by the employer from the owed wages and transferred to the public community. There are various ways in which this can occur.

The conditions for the obligation to withhold taxes in Switzerland are:Foreign workers residing or staying in Switzerland

1. Employment of a foreign worker in Switzerland
2. Tax residence or stay (longer than 30 days) in Switzerland
3. Employee does not hold a C residence permit and is also not married to a person who has Swiss citizenship or a C settlement permit

Employees with no residence or stay in Switzerland

‍Employees work in Switzerland but do not have a residence in the country and are not excluded from tax by the Double Taxation Treaty.

‍Foreign-based speakers, artists, and athletes

Artists living abroad who perform their activity in Switzerland are subject to withholding tax for the compensation received. Additionally, the organizers are liable for withholding tax on the income they generate.

‍Foreign-based members of the management or executive board of legal entities based or actually managed in Switzerland

‍Members of the management and executive board of legal entities based in Switzerland become subject to withholding tax if the work is performed in Switzerland.

When the obligation for withholding tax arises, the employer must notify the competent authority within eight days. If the employee resides in Switzerland, the authority of the place of residence must be informed. If the employee does not reside in Switzerland, the responsibility falls to the canton in which the employee is employed. The level of withholding tax rates varies quite significantly between different cantons.

Our experts are happy to advise you on all matters relating to withholding tax. Calculate your quote online and arrange a consultation.

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