Leaflet. 29/410 of the Cantonal Tax Office on withholding taxes applicable to pension benefits under public law for persons without domicile or in Switzerland (of 19 March 2013) Valid from 1 January 2013 A. Taxpayers 1. Persons without domicile or in Switzerland shall be subject to withholding tax if they receive retirement pay, pensions, old-age pensions, invalidity pensions or survivors' pensions, capital benefits or other remunerations from an employer or a pension fund based upon former employment relationships under public law. 2. Persons who receive capital benefits from pensions shall also be subject to withholding tax if the capital benefits are paid out at a time when they do t have domicile or in Switzerland (any more) 1. Withholding taxes shall also be levied if the capital benefit is transferred to a Swiss account. Persons who fail to provide consistent information on their domicile at the time of the payment of their capital benefits shall be subject to withholding tax. Persons who have never had their domicile in the Canton of Zurich because of their domicile outside the canton or abroad shall also be taxable. No withholding tax shall be levied if capital benefits have already been taxed in accordance with the regular assessment procedure and evidence is provided thereof (e.g. by means of a confirmation of the Tax Office of the municipal administration of the pension recipient). B. Taxable performance 1. Any remuneration, for example pensions and capital benefits, paid out by pension funds of the state and its agencies, municipalities and their agencies or other corporations under public law with registered office or establishment in the Canton of Zurich shall be taxable. 2. This may be the case for pensions und capital benefits from - Government employees' pension fund for the Canton of Zurich, - Pension fund of the Zürcher Kantonalbank, - Pension fund of the Elektrizitätswerke des Kantons Zürich (power utilities of the Canton of Zurich), 1 The decisive date is the date of cancellation of registration (to be clarified by the pension fund) with the commune of domicile. 1
- Pension fund for the city's personnel and the teachers in the City of Zurich, - Pension fund of the City of Winterthur, - Pension and assistance fund of the der municipalities Adliswil, Dübendorf, Herrliberg, Horgen, Kilchberg, Küsnacht, Männedorf, Meilen, Rüschlikon, Rüti, Thalwil and Wald, - Widows and Orphans Foundation for teachers at higher education establishments of the Canton of Zurich, - Widows and Orphans Fund for teachers of the cantonal school Winterthur. C. Calculation of the tax (cantonal, municipal and federal taxes) I. Capital benefits 1. Calculations based on the table Withholding taxes are calculated on the basis of the gross amount of capital benefits and amount to the following in accordance with the table below (rounded down to CHF 1 000 respectively): a. for capital benefits up to CHF 150 000 2
Capital benefits CHF Withholding tax CHF Capital benefits Withholding tax Capital benefits Withholding tax CHF CHF CHF CHF 999 0.00 51 000 3 115.50 102 000 6 557.50 1 000 60.00 52 000 3 181.00 103 000 6 630.00 2 000 120.00 53 000 3 246.50 104 000 6 702.50 3 000 180.00 54 000 3 312.00 105 000 6 775.00 4 000 240.00 55 000 3 377.50 106 000 6 847.50 5 000 300.00 56 000 3 443.00 107 000 6 920.00 6 000 360.00 57 000 3 508.50 108 000 6 992.50 7 000 420.00 58 000 3 574.00 109 000 7 065.00 8 000 480.00 59 000 3 639.50 110 000 7 137.50 9 000 540.00 60 000 3 705.00 111 000 7 210.00 10 000 600.00 61 000 3 770.50 112 000 7 282.50 11 000 660.00 62 000 3 836.00 113 000 7 355.00 12 000 720.00 63 000 3 901.50 114 000 7 427.50 13 000 780.00 64 000 3 967.00 115 000 7 500.00 14 000 840.00 65 000 4 032.50 116 000 7 572.50 15 000 900.00 66 000 4 098.00 117 000 7 645.00 16 000 960.00 67 000 4 163.50 118 000 7 717.50 17 000 1 020.00 68 000 4 229.00 119 000 7 790.00 18 000 1 080.00 69 000 4 294.50 120 000 7 862.50 19 000 1 140.00 70 000 4 360.00 121 000 7 935.00 20 000 1 200.00 71 000 4 425.50 122 000 8 007.50 21 000 1 260.00 72 000 4 491.00 123 000 8 080.00 22 000 1 320.00 73 000 4 556.50 124 000 8 152.50 23 000 1 380.00 74 000 4 622.00 125 000 8 225.00 24 000 1 440.00 75 000 4 687.50 126 000 8 305.00 25 000 1 500.00 76 000 4 756.50 127 000 8 385.00 26 000 1 562.00 77 000 4 825.50 128 000 8 465.00 27 000 1 624.00 78 000 4 894.50 129 000 8 545.00 28 000 1 686.00 79 000 4 963.50 130 000 8 625.00 29 000 1 748.00 80 000 5 032.50 131 000 8 705.00 30 000 1 810.00 81 000 5 101.50 132 000 8 785.00 31 000 1 872.00 82 000 5 170.50 133 000 8 865.00 32 000 1 934.00 83 000 5 239.50 134 000 8 945.00 33 000 1 996.00 84 000 5 308.50 135 000 9 025.00 34 000 2 058.00 85 000 5 377.50 136 000 9 105.00 35 000 2 120.00 86 000 5 446.50 137 000 9 185.00 36 000 2 182.00 87 000 5 515.50 138 000 9 265.00 37 000 2 244.00 88 000 5 584.50 139 000 9 345.00 38 000 2 306.00 89 000 5 653.50 140 000 9 425.00 39 000 2 368.00 90 000 5 722.50 141 000 9 505.00 40 000 2 430.00 91 000 5 791.50 142 000 9 585.00 41 000 2 492.00 92 000 5 860.50 143 000 9 665.00 42 000 2 554.00 93 000 5 929.50 144 000 9 745.00 43 000 2 616.00 94 000 5 998.50 145 000 9 825.00 44 000 2 678.00 95 000 6 067.50 146 000 9 905.00 45 000 2 740.00 96 000 6 136.50 147 000 9 985.00 46 000 2 802.00 97 000 6 205.50 148 000 10 065.00 47 000 2 864.00 98 000 6 274.50 149 000 10 145.00 48 000 2 926.00 99 000 6 343.50 150 000 10 225.00 49 000 2 988.00 100 000 6 412.50 50 000 3 050.00 101 000 6 485.00 3
b. for capital benefits between CHF 150 000 and CHF 900 000 The tax is comprised of CHF 10 225 on the first CHF 150 000 in accordance with the table and 8.60 % on the part of the capital benefits exceeding CHF 150 000. Example: Withholding tax on a capital benefit of CHF 700 000 amounts to CHF 10 225 plus CHF 47 300 = CHF 57 525. The CHF 47 300 result from 8.60 % on CHF 550 000 (CHF 700 000 minus CHF 150 000). c. for capital benefits exceeding CHF 900 000 The tax amounts to 8.30 % on the total amount. Example: Withholding tax on capital benefits of CHF 2 000 000 amount to CHF 166 000 (8.30 % on CHF 2 000 000). 2. Calculation based on the percentage If you do t calculate the amount of withholding taxes directly on the basis of the table above, but rather on the basis of a percentage calculation, the withholding tax deduction shall refer to the gross amount of the capital benefit: for the first CHF 25000 6.00 % (tax-free up to CHF 999 ) for the next CHF 25000 6.20 % for the next CHF 25000 6.55 % for the next CHF 25000 6.90 % for the next CHF 25 000 7.25 % for the next CHF 25000 8.00 % for the next CHF 750 000 8.60 % For taxable capital benefits exceeding CHF 900 000, withholding tax shall be 8.30 % of the total amount. Persons owing the taxable performance shall calculate withholding taxes on the basis of every individual pension benefit and settle it with the competent tax authority (cf. item E). For practical applications, please refer to the separate table. II. Pensions Withholding taxes amount to a total of 7% of gross benefits. Pensions that do t exceed CHF 1 000 per calendar year shall t be subject to withholding tax deductions. 4
D. Reservation of the double taxation agreement I. General provisions 1. Capital benefits Capital benefits shall always be subject to withholding tax. If there is double taxation agreement (DTA) between Switzerland and the of the recipient of the capital benefit, the withholding tax deduction shall be definitive. The same rule shall also apply whenever there is a double taxation agreement, given that on a regular basis, the right of taxation is assigned to Switzerland (cf. table below). Only in those cases where the DTA assigns the right of taxation to the foreign shall the withholding tax deduction t be definitive, and the taxpayer is entitled to claim repayment (cf. table below). If the taxpayer is entitled to claim repayment, the total withholding taxes deducted shall be reimbursed if, within three years of the due date, he submits the filled in official reimbursement form (form Q 303) according to which the capital benefit is kwn to the competent tax authority of his foreign. This form can be obtained at the competent local tax authority and shall be handed to the taxpayer by the pension fund. 2. Pensions In general, pensions shall be subject to withholding tax. Withholding taxes shall be levied without limitation if Switzerland has t concluded a double taxation agreement (DTA) with the foreign. If there is a double taxation agreement between Switzerland and the state in which the pensioner resides, in the majority of cases the right of taxation is assigned to Switzerland (cf. table below). However, in those cases where the DTA assigns the right of taxation to the foreign, pension payments shall be paid out without deductions (cf. table below). In this case, pension funds shall verify that the pensioner has his domicile in the respective state; this shall be checked periodically by means of a confirmation that he is still alive and a resident of said state. 5
II. Overview of double taxation agreements The table below (as at 1.1.2013) shows the cases in which the taxpayer shall be entitled to claim repayment () or t () or in which cases withholding taxes shall be applied to pensions () and in which cases benefits shall be paid out without deductions () due to a double taxation agreement. Foreign 1 Capital benefits Entitlement to claim repayment for citizens of the foreign and of the foreign (dual citizenship) of a third country (neither Switzerland r foreign country of ) Egypt Albania Algeria 2 Armenia Azerbaijan Australia Bangladesh 2 Belarus Belgium Bulgaria Chile 6 Chinese Taipeh (Taiwan) 6 China Denmark Germany Ecuador Ivory Coast Estonia Finland France 5 Georgia 7 Ghana 2 Greece Great Britain Hong Kong India Indonesia Iran Ireland Iceland Israel 3 3 Italy Jamaica Japan Canada Kazakhstan Qatar 6 Kyrgyzstan Colombia 7 Croatia Kuwait Latvia Liechtenstein 4 Lithuania 6
Foreign country 1 Capital benefits Entitlement to claim repayment for citizens Luxembourg Malaysia Malta Morocco of the foreign and of the foreign (dual citizenship) of a third country (neither Switzerland r foreign country of ) Macedonia Mexico Moldova Mongolia Montenegro New Zealand Netherlands Norway 9 Norway 6 (if exceeding 15%) (if exceeding 15%) (if exceeding 15%) (if exceeding 15%) Austria Pakistan Philippines Poland Portugal Romania Russia Sweden (until 31.12.2012) Sweden(from 1.1.2013) Serbia 8 Singapore Slovak Republic Slovenia Spain Sri Lanka South Africa 2 No South Korea Tajikistan 7 Thailand Trinidad and Tobago Czech Republic 1 For all the other countries t listed above, capital benefits shall never be subject to an entitlement to claim repayment and pensions shall always be subject to withholding tax deductions. 2 Applicable as from 1 January 2010. 3 Entitlement to claim repayment if transferred to Israel (request tax clearance certificate). 4 No withholding tax on pensions or entitlement to claim repayment for capital benefits due to former employment relationships with institutions under public law involving both states. 7
5 6 7 8 9 Capital benefits due as from 1 January 2011 paid out to persons who are t Swiss citizens shall only be subject to an entitlement to claim repayment to the extent as that benefit is actually taxed in France. The tax clearance certificate as well as the corresponding calculation modalities from France shall be appended to the request for repayment. Applicable as from 1 January 2011. Applicable as from 1 January 2012. The agreement with Serbia ceased to apply to Kosovo from 1 January 2011. Applicable until 31 December 2010. Foreign 1 Capital benefits Entitlement to claim repayment for citizens of the foreign and of the foreign (dual citizenship) of a third country (neither Switzerland r foreign country of ) Tunesia No No No No Turkey No No No No Ukraine No No Hungary No No Uruguay No No Usbekistan No No Venezuela No No United Arab Emirates No No No No United States (USA) No No Vietnam No Foreign country 1 Pensions Withholding tax deduction shall be applicable to citizens of the foreign and of the foreign (dual citizenship) of a third country (neither Switzerland r foreign country of ) Egypt Albania Algeria 2 Armenia Azerbaijan Australia Bangladesh 2 Belarus Belgium Bulgaria Chile 5 (max. 15%) (max. 15%) (max. 15%) (max. 15%) Chinese Taipeh (Taiwan) 6 China Denmark Germany Ecuador Ivory Coast Estonia Finland 8
France Georgia 6 Ghana 2 Greece Great Britain Hong Kong India ja Indonesia Iran Ireland Iceland Israel 3 3 Italy Jamaica Japan Canada Kazakhstan Qatar 5 Kyrgyzstan Colombia 6 Croatia Kuwait Latvia Liechtenstein 4 Lithuania Luxembourg ja Malaysia Malta Morocco Macedonia Mexico Moldova Mongolia Montenegro New Zealand Foreign country 1 Pensions Withholding tax deduction shall be applicable to citizens of the foreign and of the foreign (dual citizenship) of a third country (neither Switzerland r foreign country of ) Netherlands (until 31.12.2011) Netherlands 9 (from 1.1.2012) s Norway 7 Norway 5 (max. 15%) (max. 15%) (max. 15%) (max. 15%) Austria Pakistan Philippines Poland Portugal Romania Russia Sweden (until 31.12.2012) Sweden (from 1.1.2013) Serbia 8 Singapore (until 31.12.2012) Singapore (from 1.1.2013) Slovak Republic 9
Slovenia Spain Sri Lanka South Africa 2 South Korea Tajikistan 6 Thailand Trinidad and Tobago Czech Republic Tunisia Turkey Ukraine Hungary Uruguay Uzbekistan Venezuela United Arab Emirates United States (USA) Vietnam 1 For all the other countries t listed above, capital benefits shall never be subject to an entitlement to claim repayment and pensions shall always be subject to withholding tax deductions. 2 Applicable as from 1 January 2010. 4 Entitlement to claim repayment if transferred to Israel (request tax clearance certificate). 5 No withholding tax on pensions or entitlement to claim repayment for capital benefits due to former employment relationships with institutions under public law involving both states. 5 Applicable as from 1 January 2011. 6 Applicable as from 1 January 2012. 7 Applicable until 31 December 2010. 8 The agreement with Serbia ceased to apply to Kosovo from 1 January 2011. 9 Withholding tax deduction does t apply to pensions if the pensioner provides evidence that the preconditions of Art. 18 (2) DTA CH-NL have t been met. The documents to be provided as evidence remain to be determined by mutual agreement by Switzerland (CH) and the Netherlands (NL). In particular, evidence is required that at least 90% of the pension (gross) is taxed in the. 10
E. Settlement of accounts and transfer to the local tax office 1. Withholding taxes are due at the moment of the payment or credit entry of the pension benefit and shall be transferred within 30 days of the beginning of the month following the due date to the Tax Office of the municipality in which the pension fund has its registered office or an establishment. Default interest shall be paid in case of late payment of withholding taxes. 2. The pension fund shall submit to the competent local tax office the complete, filledin official assessment form (form Q 6) with indication of the name, first name (foreign) of the person liable to pay taxes as well as the date of payment and the gross amount of the pension benefit, the withholding tax rate and the amount of the deducted withholding taxes. It shall be entitled to an entitlement commission of 4% of the withholding tax transferred. 3. The pension fund shall be liable for the correct collection and transfer of withholding taxes. In case of doubt, prior to an unreduced payment of a capital benefit, the taxpayer shall be asked to produce a confirmation of the (Swiss) tax office of the commune of domicile stipulating that the capital benefit has already been taxed in an ordinary procedure. In the event of death of an accountholder, it is to be verified whether persons without domicile in Switzerland are among the heirs. Their share shall be subject to withholding tax. 4. Cases of wilful or negligent failure to assess withholding taxes shall be considered as tax evasion. F. Certificate on tax deduction The person liable to pay tax shall be issued a certificate indicating the amount of deducted withholding tax without being asked. G. Appeals If the taxpayer or the pension fund do t agree with the withholding tax deduction, they may request a decision by the Cantonal Tax Office, Withholding Tax Service, by the end of March of the year following the event. H. Information Information shall be given by the Cantonal Tax Office Zurich, Withholding Tax Service, Bändliweg 21, 8090 Zurich, phone 043 259 37 00, as well as by the Tax Office of the municipality in which the pension fund has its registered office or an establishment. If the registered office or the establishment is located in the City of Zurich, the Tax Office of the City of Zurich, Withholding Tax Service, Werdstrasse 75, 8022 Zurich, phone 044 412 34 00, shall be responsible. 11
Zurich, (date) Cantonal Tax Office Zurich Headed by: Adrian Hug 12