duodena mordecai: B permit, income - English Forum Switzerland

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B permit, income < 120k/year, but with income abroad

Hello everybody,

I am new to the forum, but not in Switzerland - where I have been for a couple of years now.

So, I am wondering where I need to do something regarding tax declaration/payment. Here is my situation:
- B permit,
- Canton LU
- tax withhold at source from my employer
- global income < 120k/year
- 5 to 8k/year income from interest from bank account abroad (which represents less than 10% from my "bruttolohn")

Questions:
- should I declare this income abroad to the cantonal tax office?
- if yes, I will have to do the regular tax declaration or only a simplified declaration over this income from abroad?
- which percentage (+/-) would I pay as penalty for submitting the declaration and paying it delayed?

Thanks

Re: B permit, income < 120k/year, but with income abroad

Quote:

Hello everybody,

I am new to the forum, but not in Switzerland - where I have been for a couple of years now.

Thanks

In theory yes............................................... ....not everybody does apparently

Has any tax been deducted at source? if so the balance payable will be quite low & the tax office will probably just send out a final balance to pay.

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Re: B permit, income < 120k/year, but with income abroad

Yes, if you are a Swiss resident you are taxed on your worldwide income (income tax) and your worldwide assets ie capital and property etc (wealth tax). So you should be making an annual tax declaration.
I also have heard that some foreigners "forget" to declare foreign income and assets, particularly when smallish sums are involved and they are not likely to be here for any length of time, but in these days of ever- increasing bank and tax transparency I think it is just too risky to do.

Re: B permit, income < 120k/year, but with income abroad

8000 CHF a year in bank interest, at current exchange rates, would mean savings of 400,000 to 800,000 CHF I guess.

If you declare the interest would they then ask the OP to declare the wealth tax, or don't they do joined-up thinking like that?

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Re: B permit, income < 120k/year, but with income abroad

	Quote:
	8000 CHF a year in bank interest, at current exchange rates, would mean savings of 400,000 to 800,000 CHF I guess.

Only 200K CHF in NZ (basic off-the-shelf 1 year term deposit), probably other countries where it would be much less still.

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Re: B permit, income < 120k/year, but with income abroad

If it were me, I'd not bother declaring it. The amount is quite small and the tax offices here generally aren't worried too much about small amounts of foreign income, especially if you don't bring the money into Switzerland. imo.

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Re: B permit, income < 120k/year, but with income abroad

Quote:

Hello everybody,

- global income < 120k/year
- 5 to 8k/year income from interest from bank account abroad (which represents less than 10% from my "bruttolohn")

Thanks

The penalties for late declaring are VERY low (sometimes zero) in Switzerland. Interest charged on the taxes due are also VERY low. So you are not charged a fortune just for forgetting and doing something late.

Of course you have to declare it by law, it's part of your worldwide income.

Actually, it may be an advantage to pay tax on it, as you can get refund of the foreign tax (assuming you paid any, and Swiss has a double taxation treaty with that country).

If people do it, it generally it depends on (i) how long they will be here (if you are here on a 1-year placement and the interest is low) (ii) what amount we talk about.

It is not true that the CH authorities are not interested in "small amounts". On the contrary. It may be true that they don't have the aggressive 'fine everybody' attitude that other countries do, but they are still tax people.

The reason it appears to people that the tax people dont actively go after people are:
-i- Generous tax free deductions for bank interest: 3000 CHF where I live (varies by canton). So if people have 100 CHF interest, they own 0 tax whether you decare it or not. Most people earn <3000 interest, so although they should declare it, it makes no difference in tax and tax peole dont want to lose their time.
-ii- Generous "wealth tax" allowances - 120,000 CHF is tax free (varies by canton). So as most people have small balances, it also makes no sense for tax people to go after everybody.

But the situation changes once they discover or realise that you exceed these limits (actually, LU may have higher ones).
In your case, since your interest and perhaps your balance is "high" (even for swiss standards!) I would declare it and get it over with. The tax is likely to be very low anyway. But if they find out (whether if you import the money to CH and use it to buy something, or when you get permit C or your salary is >120k and you have to declare it on a declaration they will challange the earlier years, if they see a high balance/interest which means that tax was due. They will then send you the bill for the previous years with interest. (OF course , they won't do that if your interest is less than the tax free allowance, that's why some people say "I suddendly started declaring a foreign bank account and nothing happened". It would happen if the would have been tax due).

In any case, I dont think you can start the process yourself by filling a declaration - you have to contact them and say you have a bank account abroad that you need to declare and you just realosed, and they will send you the necessary form.

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Re: B permit, income < 120k/year, but with income abroad

As you can deduct 0.3% management fee on investments, that will in some cases exceed the tax payable , so a refund would be due! it's this reason I think that the tax people are very relaxed.

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Re: B permit, income < 120k/year, but with income abroad

So,

the country which I was talking about does not apply any tax on that interest. So, I would have to pay the full tax rate here in CH.

My point is: if I go to the cantonal tax office and say that, will I have to fill a tax declaration for all my income, including my CH salary (which would mean I would have to pay a lot extra tax), or a simplified one only for this extra income from abroad?

Re: B permit, income < 120k/year, but with income abroad

Quote:

So,

the country which I was talking about does not apply any tax on that interest. So, I would have to pay the full tax rate here in CH.

Wait to they send you a tax return , when you get a C permit.