Living in Switzerland Working in Germany

[martinluther]

Do I have to pay Taxes in Switzerland, if I work in Germany Monday Friday but live in Switzerland. I am currently in UK, the communte time is almost 8 hours which can be cut down to 2 hours if I live in Zurich and work in my current location (prospective). I dont want to live in German Cities as I would not settle in Germany.

[borderreiver]

Sigh.

Are you expecting a different answer from your other thread on the same subject?

OK, I'll take the bait and tell you my absolutely unqualified opinion: you will pay personal taxes in Switzerland but you will probably pay corporate tax in Germany.

You really need a qualified professional opinion on this, though, preferably from a German or Swiss accountant who is familiar with cross-border freelancing.

[petergriffin]

Go to the Toytown forum, there are a few expats living in Bavaria and commuting to Switzerland.

[martinluther]

Sigh.

Are you expecting a different answer from your other thread on the same subject?

This is quite different question. I would be living in Switzerland and working in Germany because I plan to settle in Switzerland. Now in UK, I dont need any residency permit as an EU citizen, but I would need that in Swiss? Second, for tax purpose if I am not UK resident then I dont pay tax in UK, but I am not sure that holds for Switzerland.

So from my previous post I conclude that I would have to register as Freelancer in Germany, but where to live is quite different question?

[BlasterBates]

You pay tax in Germany. You also declare your German earnings to the Swiss tax authority and proof of tax paid in Germany.

So as you suggest you set up as a freelancer in Germany. Well basically there is no formal procedure, a quirk of German law that stretches back a few hundred years. So go and see and "Steuerberater" in Germany and get registered with the local tax office where you´re working. If the centre of your life is in Switzerland then you will not pay tax on your worldwide income in Germany, but you´ll have to prove it! If you stay in a hotel during the week and return every weekend to Switzerland they would accept that, or if you are married and your wife is in Switzerland. If you decide to rent a flat and you are single they will assume you are mainly resident in Germany and you will have to prove otherwise. This is possible but you have to keep proof of all your journeys and a longwinded written justification with proof of why the "centre of your life" is in Switzerland. If the Germans were to decide you are a German tax resident that would mean you wouldn´t be in Switzerland, but again you would need to convince the Swiss authorities. In the end you can´t be taxed twice so don´t worry about it, but do think very carefully about clarifying this, it is just administrative hassle.

One final point on health insurance. In Switzerland you are obliged to have health insurance so you might as well take out insurance there, but do make sure your policy covers you for working in Germany. You are usually automatically covered for holidays but not necessarily for working abroad. If you are freelance in Germany I can´t see any problem in you being covered by a Swiss health insurance policy.

[martinluther]

You pay tax in Germany. You also declare your German earnings to the Swiss tax authority and proof of tax paid in Germany.

Thanks. Does that mean Swiss will not tax me again? Given that all Cantons charge you a tax for being resident, do they also offer tax credit paid in Germany and hence they would not tax me again.

[darmstadt]

Also:

You cannot be a Swiss resident by just registering, like you would for example subscribe to a golf club but never go. This means that if you are granted a Swiss residence permit, you need to actually move to Switzerland and live there for good. If you cannot stay for 180 days a year or more, then you must make sure that you do not spend more time in any other specific country than you spend in Switzerland. That rules out residence permits given for people who spend a month a year in Switzerland.


Please note that Switzerland does not know the British distinction between resident and domiciled. Here in Switzerland, either you live in Switzerland and you are a taxpayer, or you are neither.

[martinluther]

Also:

Thanks for the information. What if I shift my family and they live there and I do the commute?

[BlasterBates]

Thanks for the information. What if I shift my family and they live there and I do the commute?

In my view you would be tax resident in Switzerland, that´s how the Swiss authorities would view it. You are basically tax resident where your family is, as long as you are returning regularly, and I think the German authorities would accept that as well. As I mentioned above that still means you pay tax on your contract earnings in Germany but you wouldn´t be subject to tax on earnings elsewhere.

So you will submit a tax return in Germany and explain that your family is in Switzerland and you travel back at the weekend, and you submit a tax return in Switzerland and include your German income with proof of tax paid in Germany, i.e. a letter from the German authorities that you pay your tax there and the "Steuerebescheid" i.e. the tax statement, when it arrives as you will probably not get it before you submit your tax return in Switzerland.

I

[Ignis Fatuus]

This is quite different question. I would be living in Switzerland and working in Germany because I plan to settle in Switzerland. Now in UK, I dont need any residency permit as an EU citizen, but I would need that in Swiss? ...

In Switzerland, as an EU citizen you have the right to work for 90 days without a permit. After that you need an EU citizen's permit to work in Switzerland (virtually automatic).

As a legal worker (as described above) you have the right to live in Switzerland.

But (here's the tricky bit) if you are NOT legally working in Switzerland, you do not necessarily have the right to live there just because you are an EU citizen.

I may be wrong about that but that is how I understand it. (FWIW the EU itself, or rather the EC at the time, was once like that: the principle was free movement of labour, without a job you didn't have freedom to stay)