Self-employment, AHV and taxes.
I am a Greek (EU) citizen. I moved to Basel last July and I hold an L-permit I am a Textile Engineer and have been making textile jewelry for the last couple of years. I'm interested in setting up a small business from my home and through self-employment, start producing and selling my jewelry with my brand on it. My worry is that my jewelry will generate neither a standard, nor a high annual income--at least not in the beginning--so I do not know what to expect regarding paying taxes and insurance.
From your expertise, would it be good to register as self-employed? Where should I register and what documents are involved in the application process? Also, although I am learning German at the moment, I am not yet able to communicate in the language, only in English or Italian.
As an EU-citizen you are entitled to be self-employed in Switzerland but have to register this with the relevant authorities. The first step will be to contact your local Ausgleichskasse (social security office) and register there as self-employed. Once this has happened, you should approach the Amt fur Wirtschaft und Arbeit and have your L-permit adjusted. As you already have a residence permit, it is unlikely that the authorities will investigate how profitable your self-employment is.
As a self-employed person you will have to pay your own social security contributions (between 4.5% and 9% of the profit, depending on how much the annual profit is). You will also have to complete a tax return and pay taxes on the profit from you business. Again, the taxes depend on the amount of profit you are making.
I was told by a former tax person in Switzerland that if I paid tax in the United States, I would have no obligation here. However, I recently received a letter from my canton (Fribourg) telling me I have to pay Swiss taxes for 2004, 2005, and now 2006. I know there is a treaty in place between the U.S. and Switzerland preventing double taxation, but I am a little confused about it.
I have a B-permit and am employed by a U.S. company; my pay is deposited in my U.S. checking account. I have been in Switzerland for the past three years. Any clarification and guidance would be appreciated.
The advice you were given was wrong. Switzerland will tax your worldwide income and assets on the basis that you are resident in the country. The United States on the other hand, taxes all its citizens whether they reside in the U.S. or not. There is a Double Taxation Treaty between the...
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