Are you a temporary resident in Switzerland? If so, it’s important to understand your tax obligations, especially if you have investments in or returns from crypto assets.
Permanent vs. Temporary Residents
In Switzerland, there are two types of residents: permanent residents (Swiss citizens or c-permit holders) and temporary residents (e.g. b-permit holders). Permanent residents are taxed differently from temporary residents, so it’s important to make sure that you understand which system applies to you. This article will focus solely on the tax obligations of temporary residents in Switzerland.
The Subsequent Ordinary Assessment
In Switzerland, temporary residents are taxed at source on their employment income, but if you have additional income or assets, you may be required to undergo a subsequent ordinary assessment. If you live in the Canton of Zurich and have additional income not subject to withholding tax exceeding CHF 3,000, or assets exceeding CHF 80,000 (CHF 160,000 for jointly taxable persons), you are required to undergo a subsequent ordinary assessment. It’s important to note that the thresholds for subsequent ordinary assessment vary from Canton to Canton.
As a tax payor, it’s your responsibility to check if you meet the requirements for subsequent ordinary assessment and to register with the tax authorities no later than 31 March of the year following the tax year. Failure to do so can result in penalties and fines. It’s crucial to keep track of your investments in or returns from crypto assets and to be aware of your tax obligations to avoid any issues with the tax authorities.
Investments in or returns from crypto assets can quickly exceed the thresholds for subsequent ordinary assessment. Therefore, it’s important to keep track of these assets for tax purposes. Working with a Swiss tax expert can help you navigate the complex tax landscape and ensure that you meet your obligations.