Taxes explained: it's around this time of the year that most of us make our tax saving and expenditure plans for the New Year. Tax expert Gaby J. Mueller explains the basics of filing returns.
| Auteur | Sethi, Aradhna |
| Fonction | Expat Advice |
If you have been here long enough, you would have received a set of official papers from the government regarding tax returns. For many, these papers are undecipherable due to language constraints. Others wonder if getting the documents at their residence was a mistake as it is their company that handles their taxes. Still others simply ignore the papers till they get reminders and then rush to local friends for help or crib all the way to the bank to withdraw money for the last-minute tax consultation, for something they believe is far-fetched and 'just a hassling formality'.
Whatever your situation, Swiss News talks to Gaby Mueller, tax expert and head of her private company Audit and Tax Network AG to provide you with the basic know-how of taxation.
The Tax System
To begin with, many of us would like to "know how the tax system in Switzerland works. Says Mueller, "Taxes in Switzerland are paid at three levels--the first level comprises the Federal tax to the Swiss Federal government; then comes the Cantonal and Communal taxation, which is normally levied for the canton and town you live in; and then is the Church tax you pay if you are a member of either protestant or catholic church and have given this information when registering in Switzerland. This is paid through the cantonal tax invoice that you receive. If your taxes are withheld by your company, the employer is responsible for paying out all three taxes based on your registration details, which include, your marital status, number of children, whether you are a church member, etc. In this case, you don't get a personal invoice."
She explains further, "At the tax administration, there is an account held in the name of every employee. The money withheld from the ,salary of every foreign employee is then deposited into the account at the year-end by the employer. Thus, the tax administration deciphers how much each person earns.
If you earn over CHF 120,000 on an annual, gross basis, you are entitled to be treated like a Swiss citizen at the Cantonal and the Federal tax level. This means that you have to file tax returns, giving all individuals details and deductions. Once that is done, the amount your employer sent into your individual account at the tax administration is considered as an account payment and credited against final tax bill. This bill is eventually sent to you based on the tax return filed."
In other words, when you file the returns, the tax authority matches your details to the taxes paid by the employee. In case of over taxation, you get a refund; and in case you have been taxed lower...
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