Ordinance on Withholding Tax (QStV) - Applicable Withholding Tax Rates (QStV)

1. The following tariff codes are applied for withholding tax for the following persons and incomes

a. Tariff Code A: for single, divorced, judicially or factually separated, and widowed persons who do not live with children or persons in need of support in the same household,

b. Tariff Code B: for couples living in a legally and factually undivided marriage, where only the husband or the wife is employed,

c. Tariff Code C: for couples living in a legally and factually undivided marriage, where both spouses are employed,

d. Tariff Code D: for persons receiving benefits under Article 18, paragraph 3 of the Federal Law on Old-Age and Survivors’ Insurance of December 20, 1946,

e. Tariff Code E: for persons taxed under the simplified settlement procedure according to §§ 25-28,

f. Tariff Code F: for cross-border commuters under the agreement between Switzerland and Italy concerning the taxation of cross-border commuters and the financial compensation in favor of the Italian border municipalities of October 3, 1974, who live in an Italian border municipality and whose husband or wife is employed outside Switzerland,

g. Tariff Code G: for replacement incomes according to § 3, which are not paid through employers to the persons liable to withholding tax,

h. Tariff Code H: for single, divorced, judicially or factually separated, and widowed persons who live with children or persons in need of support in the same household and mainly bear their maintenance,

i. Tariff Code L: for cross-border commuters under the agreement between the Swiss Confederation and the Federal Republic of Germany to avoid double taxation in the field of taxes on income and property (DBA-D) of August 11, 1971, who fulfill the requirements for tariff code A,

j. Tariff Code M: for cross-border commuters under the DBA-D, who fulfill the requirements for tariff code B,

k. Tariff Code N: for cross-border commuters under the DBA-D, who fulfill the requirements for tariff code C,

l. Tariff Code P: for cross-border commuters under the DBA-D, who fulfill the requirements for tariff code H,

m. Tariff Code Q: for cross-border commuters under the DBA-D, who fulfill the requirements for tariff code G.

2. The tax deductions according to paragraph 1a-c as well as h are made depending on the circumstances either with or without the church tax.

1. The withholding tax deduction is due at the time of payment, transfer, crediting, or offsetting of the taxable performance. The debtors of the taxable performance must deduct the withholding tax regardless of any objections (§ 118 StG) or wage garnishments.

2. The Canton Tax Office calculates the individual rates within the tariff codes according to the deductions and rates applicable to income tax.

3. For the calculation of the withholding tax, § 54 paragraph 4 StG applies mutatis mutandis.

1. Subject to withholding tax are all substitute incomes from employment relationships as well as from health, accident, disability, and unemployment insurance. In particular, this includes daily allowances, compensations, partial pensions, and capital benefits replacing them.

2. Daily allowances and other substitute incomes that employers pay out are taxed together with any employment income according to the applicable tariff pursuant to § 1 paragraph 1.

3. Capital benefits are taxed in accordance with § 58 of the Tax Act (StG).

1. The withholding tax for German cross-border commuters is 4.5 percent of the taxable gross income for tariff codes L, M, N, P, and Q. This includes a federal tax portion of 0.5 percent, but does not include a church tax portion.

1. If a taxable person receives remuneration from non-resident debtors of the taxable service in Switzerland, they shall be assessed through the ordinary procedure.

2. However, they shall be taxed at source in Switzerland if

a. the remuneration for the service is borne by a business establishment or permanent establishment of the employer located in Switzerland,

b. an employee secondment exists between affiliated companies and the company with its registered office in Switzerland is to be qualified as the de facto employer, or

c. a foreign personnel leasing is in contradiction to Article 12 paragraph 2 of the Employment Services Act of October 6, 1989, and lends personnel to an establishment in Switzerland, and the remuneration for the service is borne by this establishment.

1. Employers must report the employment of individuals who are subject to withholding tax under §§ 101, 106 or 107 StG to the competent tax authority within eight days from the commencement of employment using the designated form. If employers submit the withholding tax statement electronically, they may report new hires through the monthly statement.

2. Employees must report to their employers any changes in circumstances that are relevant to the collection of withholding tax. Employers must notify the competent tax authority of any changes within the deadlines specified in paragraph 1.

3. Married couples, who live together legally and factually and are both principally employed in Switzerland, are obligated to inform their employers about their spouse's employment. This applies correspondingly to individuals living in a legally and factually undivided registered partnership.

4. The Migration Office must report to the cantonal tax office any newly arrived working foreign individuals.

5. Municipalities must report to the cantonal tax office any registrations, deregistrations, and changes in civil status of employed foreign individuals without a permanent residence permit.

1. The implementation of withholding tax is the responsibility of the tax department of the canton in collaboration with the debtors of the taxable performance, subject to the provisions of paragraphs 2 and 3.

2. The assessment of withholding tax according to § 110 StG is the responsibility of the ordinary assessment authority.

3. The assessments according to §§ 105, 105a, 112, and 112a StG are carried out by the ordinary assessment authorities.

1. The Tax Office of the Canton collects the taxes assessed by it pursuant to § 7 paragraph 1.

2. The collection authority according to § 189 StG collects the withholding tax pursuant to § 110 StG.

1. The Tax Authority of the Canton may partially or fully waive the payment of tax arrears for debtors of the taxable benefit who have in good faith not made the tax deduction correctly or at all if the passing on of such tax to the taxpayers is no longer possible.

1. Debtors of the taxable service receive a handling commission of 1 percent of the submitted tax amount for their participation. If they transmit the withholding tax statement using the electronic salary reporting system (ELM), the handling commission amounts to 2 percent of the submitted tax amount. For the submission of withholding tax on capital payments, the handling commission amounts to 1 percent of the submitted tax amount regardless of the method of transmitting the withholding tax statement, but no more than 50 Swiss francs per capital payment for the federal, cantonal, and municipal withholding tax.

2. If debtors of the taxable service violate their procedural obligations, the Tax Office of the Canton may reduce the handling commission. If a tax estimation must be made by the Canton Tax Office due to the failure to submit a statement, the handling commission is forfeited.

1. If debtors of the taxable service have made an excessive withholding tax deduction and have already settled this with the competent tax authority, the authority may directly refund the difference to the taxable person. § 118 paragraph 1 of the StG applies mutatis mutandis.

2. The refund of church tax for families, whose members belong to different denominations, is governed by § 240 paragraph 2 of the StG. In the case of departures from the religious community, it is governed by § 240 paragraph 3 of the StG.

1. The Tax Office of the Canton prepares an account of the withholding tax revenues at the end of each calendar year and determines the share for each entitled community according to the following guidelines

a. For the allocation of the municipal tax shares, the respective duration of residency of the employees is decisive.

b. Administrative costs are deducted from the gross revenue first.

c. The net revenue is initially divided by separating the amount related to the full personnel tax and distributed according to the provisions of §§ 230 ff. of the Tax Act (StG).

d. The deficit of those municipalities whose total tax rate for state tax, municipal tax, and church tax exceeds the average calculated for the rates is covered by the surplus of those municipalities whose total tax rate is below the average burden of state tax, municipal tax, and church tax. The deficit coverage is provided in the same proportion as the municipalities participate in the surplus.

e. Furthermore, the shares of the individual communities are determined in relation to the approved tax units.

2. The Tax Office of the Canton makes provisional quarterly advance payments to the entitled municipalities.

1. A person shall be subsequently assessed under § 105 paragraph 1a StG if their gross income from dependent employment amounts to at least 120,000 Swiss Francs in a tax year.

2. Gross income from dependent employment shall be considered as the income according to § 102 paragraph 2a and b StG.

3. Couples with dual incomes shall be subsequently assessed if the gross income of either the husband or the wife amounts to at least 120,000 Swiss Francs in a tax year.

4. The subsequent regular assessment shall be maintained until the end of the liability to withholding tax, regardless of whether the gross income temporarily or permanently falls below the minimum amount of 120,000 Swiss Francs, or whether the spouses divorce or separate either actually or legally.

5. If the tax liability in the canton does not last a full calendar year, the gross income taxed at source, converted to twelve months, shall be decisive for the calculation of the minimum amount.

6. The collection of withholding tax under paragraph 1 may be waived if the debtor of the taxable benefit or the person liable for withholding tax provides sufficient security.

1. The person liable for withholding tax may submit a written application to the competent tax authority for a subsequent ordinary assessment by March 31 of the year following the tax year. An application that has been submitted cannot be withdrawn.

2. Divorced individuals, as well as spouses who are legally or de facto separated, who have been subsequently ordinarily assessed upon application according to § 105a StG, will continue to be subsequently ordinarily assessed until the end of the withholding tax liability.

1. Upon request from individuals subject to withholding tax who make maintenance payments as per § 40 paragraph 1c StG, and to whom tariff codes A, B, C, or H are applied, the tax authority may, to alleviate hardship cases, consider child deductions up to a maximum amount equivalent to the maintenance payments when calculating the withholding tax.

2. If maintenance payments have been considered in the application of any of these tariff codes, a subsequent ordinary assessment will only be conducted upon application by the individuals subject to withholding tax. If a subsequent ordinary assessment is requested, it will be conducted until the end of the withholding tax obligation.

1. A person who has previously been taxed at source shall be assessed through the ordinary procedure for the entire tax period if they

a. obtain a permanent residence permit,

b. marry a person with Swiss citizenship or with a permanent residence permit.

2. The withholding tax is no longer owed starting from the month following the granting of the permanent residence permit or the marriage. The tax deducted at source will be credited without interest.

3. Paragraphs 1 and 2 apply accordingly to persons who register a partnership with a person holding Swiss citizenship or a permanent residence permit.

1. If income within a tax period is initially subject to ordinary taxation and then to withholding tax, the taxpayer shall be subsequently assessed ordinarily for the entire year and until the end of the withholding tax obligation.

2. Divorce or the factual or legal separation from a husband or wife with Swiss citizenship or a permanent residence permit triggers the resumption of tax withholding at the source from the beginning of the following month for a foreign employee without a permanent residence permit. This applies correspondingly to individuals living in a factually or legally separated or dissolved partnership.

3. Any advance payments before the transition to withholding taxation and taxes deducted at the source are to be credited.

1. A person who is liable for tax pursuant to § 10 paragraph 1 StG and usually taxes at least 90 percent of their worldwide gross income, including the gross income of the husband or wife, in Switzerland (quasi-residence), may submit a written application to the tax office of the canton for a subsequent ordinary assessment by March 31 of the year following the tax year. An application once submitted cannot be withdrawn.

2. During the assessment procedure, the tax authority examines whether the taxpayer fulfilled the conditions of quasi-residence in the tax year. The determining factor is the proportion of gross income taxable in Switzerland relative to worldwide gross income in the respective tax period. The amount of gross income is to be determined according to §§ 23-25 and 27-30 StG.

1. The competent cantonal tax authorities may conduct an ex officio subsequent ordinary assessment if there is a well-founded suspicion, based on the record, that there are glaring circumstances in favor of or against the taxable person.

2. For the initiation of an ex officio subsequent ordinary assessment, § 142 of the Tax Act concerning the statute of limitations for assessments applies.

1. Daily Income for Artists, Athletes, and Speakers Residing Abroad

Daily income for artists, athletes, and speakers residing abroad shall be considered as the income as defined in § 108 Paragraph 3 of the StG divided by the number of performance and rehearsal days. The daily income particularly includes

a. the gross income, including all allowances and additional income as well as in-kind benefits, and

b. all expenses, costs, and withholding taxes assumed by the organizers.

2. If the share of an individual member in a group is unknown or difficult to determine, the average daily income per person shall be calculated for its determination.

3. Daily income also includes compensation that is not payable directly to the person subject to withholding tax but to a third party.

1. Taxable Income of Mortgage Creditors Residing Abroad

As taxable income for mortgage creditors residing abroad, the gross income from claims pursuant to § 110 StG is considered. This also includes interest that accrues to a third party rather than the person liable for withholding tax.

1. In the absence of any differing treaty provisions, the pensions received by beneficiaries residing abroad are subject to withholding tax pursuant to § 111 paragraph 1 of the Tax Act.

2. If the withholding tax is not collected because the taxation right belongs to the other contracting state, the debtor of the taxable benefit must obtain written confirmation of the recipient's foreign residence and periodically verify it.

1. Lump-sum benefits from pension plans in accordance with § 111 paragraph 1 of the Tax Act (StG) are subject to withholding tax regardless of any treaty provisions.

2. The collected withholding tax will be refunded without interest if the recipient of the lump-sum benefit

a. submits a corresponding application to the Tax Department of the Canton within three years from the date of payment, and

b. includes with the application a confirmation from the competent tax authority of the eligible state of residence, stating that

1. it has acknowledged the lump-sum benefit, and

2. the recipient of the lump-sum benefit is a resident as defined in the double taxation agreement with Switzerland.

1. Withholding tax is not levied if the gross income earned by the taxable person is less than

a. 300 francs per event for artists, athletes, and speakers,

b. 300 francs in total in a tax year for organs of legal entities,

c. 300 francs in total in a tax year for mortgage creditors,

d. 1000 francs in total in a tax year for recipients of pensions,

e. 5000 francs per capital payment for recipients of capital payments from occupational benefits.

1. Unless otherwise provided in § 59a StG and §§ 26-28, the provisions of the Tax Act concerning withholding tax and the provisions of this regulation shall apply mutatis mutandis to the simplified accounting procedure.

1. The tax is levied based on the gross salary reported to the AHV compensation fund by the employer.

1. The provisions of the Ordinance on Old-Age and Survivors Insurance of October 31, 1947, regarding the simplified accounting procedure apply mutatis mutandis for the settlement and remittance of withholding tax to the competent AHV (Old-Age and Survivors Insurance) compensation fund.

2. If the tax is not remitted following a reminder from the AHV compensation fund, the fund shall notify the tax authority of the canton in which the employer has their headquarters or residence. The tax authority shall collect the tax in accordance with the provisions of the tax legislation.

1. The AHV compensation fund transfers the collected tax payments, after deducting the commission to which it is entitled, to the tax authority of the canton in which the person subject to withholding tax resides.