CONVINUS Global Mobility Alert - Week 36.2024

BEST PRACTICE To

BEST PRACTICE To determine the correct withholding tax rate in Switzerland, Finance Management Schweiz AG would have to use the withholding tax rate A0N of the Canton of Zurich, as Mr Meister is single, has no children, and does not belong to a church. As Mr Meister is not resident in Switzerland, the withholding tax rate of the Canton of Zurich, the canton in which Finance Management Schweiz AG is domiciled, is used. To calculate the taxable income, the total earned income for the month in question must be used and then viewed from the Swiss tax perspective. Among other things, the following can be stated in this regard: In Germany, the employer pays the contributions to health insurance and long-term care insurance. In Switzerland, these employer contributions represent a non-cash benefit and must be taken into account accordingly when calculating taxable income. If there is no comparable pension fund solution in Germany for Mr Meister, a corresponding offset of the income would have to be made, as there is a deduction for pension fund contributions in the withholding tax rate. These lists are not exhaustive, however, but are merely intended to show by way of example that every detail is important and must be examined carefully. CONCLUSION The concept of the de facto employer must be examined carefully in these individual cases. About determining the correct taxable income, the various elements of remuneration must be examined carefully, as the Swiss employer is ultimately responsible and liable for this. SERIES - Selected withholding tax topics in Switzerland Part 1: Withholding tax liability even without a legal employer in Switzerland Part 2: Border crossers Part 3: Artists, athletes, speakers, and board members Part 4: The relationship between withholding tax and tax returns Part 5 - Monthly Special: Withholding tax on various remuneration elements (bonus payments, secondment allowances, employee participation, crypto payments) 8 convinus.com

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