Most EU nationals have a right to settle and work in Switzerland, and can also choose to work in Switzerland whilst living in a border country. Companies can also hire people from outside the EU, but will then need to apply for work permits. There can also be special treaty arrangements with certain countries such as the UK.
Swiss nationals and those with a “C” residency permit (normally granted after having lived in Switzerland after at least 5 years) who live in Switzerland are not taxed at source. This means that the employer does not need to calculate a tax at source to deduct from their salary to remit to the tax authorities every month.
Workers employed in Switzerland but residing abroad
For those workers who live in a border country and work in Switzerland the form of taxation will depend on the Canton of employment. In most Cantons tax will not be deducted from the salary, but the employee will be subject to tax where s/he lives and will need to declare their income there. The city or town where the employer is based can then claim back some of this income tax money, and so a form needs to be prepared every year by the employer declaring the salaries of all the employees who live outside of Switzerland.
The main exception to this is in the Canton of Geneva which applies a tax at source for workers living outside of Switzerland. The main types of permits this applies to are those of the “G” type, as well as “L”.
Foreign workers recently arrived living in Switzerland
These persons will normally receive a “B” permit and will normally be taxed in the Canton of residence. This means that the employer needs to deduct taxes based on the following criteria:
* If a spouse is also working
* How many dependent children there are
* Is a church tax paid or not (in some Cantons this is applied)
People tied to Diplomatic Missions
Employees of diplomatic missions and international organisations will be taxed according to their status. Not all workers at international organisations obtain the full diplomatic privilege which allows them to not pay taxes. Many workers are also essentially employed as freelancers by the international organisations and can expect to have to pay taxes, although not necessarily the associated social security charges, depending on the type of contract.
General information on working in Switzerland as a foreign national – because there are more aspects than just taxes to think about.