infoblatt_qst14_en withholding tax

Information sheet for persons liable to withholding tax in the Canton of Zurich
Valid from 1 January 2014
1. What is withholding tax?
Withholding tax is an arrangement whereby your employer deducts the tax due on your wages and
remits this directly to the State.
2. Who is liable to withholding tax?
The following persons are liable to withholding tax:
- Persons living in the Canton of Zurich who neither have residence permit C nor are married to a
person with residence permit C or who has Swiss citizenship
- Persons living abroad and working in Switzerland or in the Canton of Zurich as frontier workers or
as weekly commuters (irrespective of their nationality)
- Persons living abroad and working internationally for an enterprise registered in Switzerland or in
the Canton
3. What work is subject to withholding tax?
The liability to withholding tax covers gross income from employment (wages incl., commission,
bonuses, seniority and anniversary gifts, gratuities, tips, shares in profits, cash benefits from employee
stock options, etc.) and additional income for temporarily limited or interrupted gainful employment
(e.g., daily allowances from unemployment insurance, health insurance, disability insurance, accident
insurance and disability pensions from disability or accident insurance).
4. What rates are there?
The following rates are applied:
- Rate A (with or without church tax) for people living alone (single persons, separate persons,
divorced or widowed persons)
- Rate B (with or without church tax) for married single earners
- Rate C (with or without church tax) for married earning couples
- Rate D (10%) for income from secondary employment for persons with a principle employment
- Rate D (10%) for additional income that the insurer pays in addition to normal wages or not
according to insured earnings
- Rate E (5%) for remuneration charged under the simplified procedure for combating clandestine
employment (from 01.01.2008)
- Rate H (with or without church tax) for people (single persons, separate persons, divorced or
widowed persons) living with children and who finance most of their maintenance.
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Rate L (4.5%) for German frontier workers who fulfil the requirements according to rate A
Rate M (4.5%) for German frontier workers who fulfil the requirements according to rate B
Rate N (4.5%) for German frontier workers who fulfil the requirements according to rate C
Rate O (4.5%) for German frontier workers who fulfil the requirements according to rate D
Rate P (4.5%) for German frontier workers who fulfil the requirements according to rate H
Rates B, C, M and N also apply for registered partnerships.
The standard tax rate will be set for the employer with a statement from the respective local tax
authority. If there is no notification from the local tax authority at the time of the first wages payment,
the employer or the insurer will decide on the applicable rate based on the employee details that it has
checked and the applicable rates based on the family allowances paid out.
If the employee fails to identify himself sufficiently regarding his personal circumstances, the employer
or the insurer should apply the following rates:
- A0Y (Y = with church tax) for single employees and employees with an undetermined marital
status.
- C0Y (Y = with church tax) for married employees.
5. Who decides the applicable withholding tax rate?
The local authority, where the person liable for the withholding tax has his place of residence or is
staying, is responsible for announcing the rates. In the case of persons subject to the withholding tax
who have no residence or domicile in Switzerland, the local authority in which the employer has its
registered office or place of business is generally responsible.
If the person liable to the withholding tax does not agree to the stipulated rate of the withholding tax,
he may demand verification from the local tax authority until the end of March of the following calendar
year of maturity.
6. Who has to pay church tax?
Employees must – irrespective of their place of residence – pay church tax according to their
denomination under the withholding tax system. The liability to the church tax under the withholding
tax system applies with respect to the Roman Catholic, Christian and Evangelical denominations. The
liability for the church tax is illustrated in the rates as follows:
- Y: with the obligation to pay the church tax
- N: without the obligation to the pay the church tax
7. How are the costs of maintaining children considered?
If the person liable to withholding tax receives the family allowance, the employer should ensure that
the respective family allowance deduction is made when setting the rate. The family allowance
deduction should be taken into account from the month following the birth. If the person liable to
withholding tax however is not allocated any family allowance or only receives a differential allowance,
the employer or the person liable to withholding tax will reserve the right to provide evidence that the
liable party actually finances most of the maintenance for the child under his charge (minors or
children of full age undergoing initial education) and can therefore claim the family allowance. Most of
the costs of maintaining children are generally borne by the spouse who receives the higher wage.
8. Consideration of alimony payments in the case of deducting withholding tax
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If a person subject to withholding tax is required to pay money to his spouse and/or alimony, this may
lead to financial difficulty if withholding tax is applied. The person subject to withholding tax will
reserve the right in such difficult cases to request the local tax authority to verify the rate with the latter
being requested to consider the alimony payments appropriately through the ensuring of the
corresponding “child deductions”. Up to the end of March of the following year, the person subject to
withholding tax will have the possibility via the request for reassessment to bring about the effective
consideration of the alimony payments.
9. When can withholding tax be reclaimed or corrected?
With respect to errors on the part of the employer in calculating the final gross wage and in applying
the rate, which have had an adverse effect on the person subject to withholding tax, a corresponding
reimbursement may be requested up to five years in the past.
For the fiscal consideration of the following deductible expenses, a request for reassessment may be
submitted up to the end of March of the following year (the respective application form is available on
the website):
- Interest on debts
- Costs of illness and accidents
- Costs incurring following disability
- Maintenance contributions, alimony payments
- Contributions to recognized forms of compulsory pension planning (pillar 3a)
nd
- Purchase of missing contribution years in the pension fund (2 pillar)
- Effective professional costs (travelling expenses, costs of further training and costs of international
weekly stays)
- Childcare costs
- Deduction for support
- Common contributions, donations
The above-mentioned requests should be submitted to: Kantonales Steueramt Zürich, Dienstabteilung
Quellensteuer, Bändliweg 21, Postfach, 8090 Zürich.
10. What obligations to notify should be fulfilled by persons subject to withholding tax?
In order to enable the employer to calculate the withholding tax properly, the person subject to the
withholding tax should inform the employer or the cantonal tax authority without delay (the respective
form is available on the website):
- Acquisition of residence permit C
- Acquisition of residence permit C by the spouse
- Change in marital status (wedding, separation or divorce)
- Birth of children
- Commencement and discontinuance of gainful employment by the spouse
- Receipt of additional income (unemployment benefit, pension, alimony, etc.) by the spouse
- Loss of income or additional revenue by the spouse
- Change of residential address
- Change of religion
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11. Where can I request a decision on the existence and scope of the tax obligation?
In the case of questions and discrepancies, the person subject to withholding tax may turn to the
employer who should provide information and carry out any corrections directly. If the person subject
to withholding tax does not agree with the deduction of tax, he may request a decision on the
existence and scope of the tax obligation up to March of the following year from: Kantonales
Steueramt Zürich, Dienstabteilung Quellensteuer, Bändliweg 21, Postfach, 8090 Zürich.
12. What is a subsequent assessment of withholding tax?
If the gross income of a person subject to withholding tax in a calendar year exceeds CHF 120,000.00,
calculated over a year, a subsequent normal assessment for the entire income and assets of the
married couple will be carried out. In the following years, a subsequent normal assessment will be
carried out to the end of the withholding tax obligation even if the definitive income limit of CHF
120,000.00 is temporarily or permanently underrun. Only persons subject to withholding tax residing in
Switzerland or the Canton of Zurich are entitled to a subsequent normal assessment. The withholding
tax deducted will be offset free of interest; any excess tax paid will be refunded.
13. What is an additional assessment of withholding tax?
Persons subject to withholding tax with a fiscal residence in Switzerland or in the Canton of Zurich will
be assessed with respect to their income that is not subject to withholding tax deduction (e.g., income
from independent additional employment, pension, revenue from movable and immovable assets at
home and abroad, alimony payments, etc.) as well as their assets under the normal procedure. In this
procedure under the additional normal assessment, the income subject to withholding tax is
considered in determining the rate. The person subject to withholding tax should if necessary have a
tax return submitted to the local tax authority where he is resident. For the purpose of the
reimbursement of withholding tax levied on the income from securities, a list of securities will in any
case need to be submitted to the local tax authority where the person subject to withholding tax is
resident.
14. Where can I get more details and information?
Details and information are available from the local tax authority in your place of residence or from:
Kantonales Steueramt Zürich, Dienstabteilung Quellensteuer, Bändliweg 21, Postfach, 8090 Zürich
(Internet: www.steueramt.zh.ch/e-mail: [email protected]/telephone: +41 (0)43 259 37 00).
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