Tax & Accounting
A & O Kreston AG
Kreston A&O AG is a globally renowned tax, accounting, and auditing firm based in Zurich. Drawing on their years of broad industry knowledge and experience, they will not only help you relocate and enter the enticing Zuirchian market, but also become your trusted advisor and long-term partner in your professional journey in Zurich.
Kreston A&O assists expats in:
- Tax planning, assessment, and review.
- Financial reporting in accordance with company and country guidelines.
- Cross-border VAT consulting.
Tax & Accounting for Expats in Zurich
Zurich is ideal for expats with low taxes and incentives for corporations and tremendous employment opportunities for individuals at the world’s leading companies.
Key Tax & Accounting tips you should know as an expat in Zurich
- The taxes in Switzerland are collected on three levels. Federal level, Cantonal level and Municipal level.
- The federal constitution levies taxes on income, as do the cantons and municipalities; the latter also charge a wealth tax.
- While the federal tax is fixed across Switzerland, each municipality and each canton can determine its own rate of taxation for the municipal and the cantonal taxes.
- Through a useful state-run “Tax calculator” web application, you can obtain information about the tax that you will be paying for the Canton of Zurich.
- You become a tax resident while in Zurich if you establish a tax domicile or a permanent residence. Your status is complete if you spend a minimum of 30 days with employment or 90 days without employment in residency.
- As a married couple, your taxes are calculated on your combined income, which is then divided by 50 per cent. On the other hand, if only one partner is employed, you may be eligible for a very favourable tax break.
- The Swiss pension plan is very favourable and flexible. It will be a wise decision to contribute to PILLAR 2 pension plan while in Zurich, as it is tax-free, fully-transferable and can be used tax-free to invest in property.
- In case you are self-employed, you are required to declare your income by way of a tax declaration.
- If you are working in Zurich and do not yet have a residence permit, your employer deducts the municipal, cantonal and federal taxes directly from the salary.
- If your gross income exceeds CHF 120 000 per year, you are required to file a tax return and assess taxes retrospectively.
- Switzerland has double taxation agreements with over 100 countries – including all the EU and EFTA countries. These agreements also include provisions for reductions of withholding tax.
- As an expat in Zurich, you may be eligible to claim for a “housing allowance”, which is a significant tax break set to compensate for you as an expat relocating to a new country.
- It’s highly recommended to seek the services of a professional tax and accounting advisor to help you meet your financial needs, help you avoid double taxation and make sure you take advantage of all deduction, exclusion and credit you are eligible for as an expat in Zurich.
Tax & Accounting for expats establishing a business in Zurich
- Your company with a registered office or administration in Switzerland will be liable for Swiss tax like any local company. Foreign companies are liable for limited taxation if they hold real estate or a permanent establishment in Switzerland.
- In order to establish a company in Zurich, you are obliged to appoint at least one Swiss citizen as a representative of the company. Additionally, at least one member of the board of directors or a manager must be from Switzerland.
- Your company will be considered a resident of Switzerland if the legal seat (incorporation and address in Switzerland) is in Switzerland or if their effective management is located in Switzerland.
- The corporate income tax is levied on worldwide profits of your company in Zurich. However, profits derived from foreign branches or permanent establishments, foreign properties and profits undistributed by foreign subsidiaries may not be subject to taxation.
- At the federal level, capital gains are treated as ordinary income and taxed at the standard rate. However, some exceptions may apply.
- Corporate income tax is payable at federal, communal and cantonal levels.
- The normal tax year for corporate income tax is the calendar year, but companies are not obliged to draw up their accounts to the calendar-year end. Tax is payable on a current-year basis, on the profits of the accounting year ending in the calendar year.
- Expenses incurred in the ordinary course of business are generally accepted as tax-deductible.
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