Instruction of the Department of Finance on the supplementary assessment in respect of the collection of es (of 23 November 1998) A. Precondition for supplementary assessment 1 Foreign employees shall be subject to supplementary assessment if, in addition to their income subject to, they have additional income or property not taxed at source. 2 The following items shall be considered as supplementary taxable income: exceptionally not taxed at source from non-self-employed gainful employment (e.g. from income for non-self-employed gainful employment paid from abroad) from self-employed gainful employment OASI pensions Full old-age pensions under the IV (invalidity insurance) due to one hundred percent invalidity Full old-age pensions under accident insurances due to one hundred percent invalidity Pensions under 2nd pillar and pillar 3 a Domestic and foreign income from securities and credit from real estate Alimony the taxpayers receive for themselves or for children under their parental authority from the granting or using of copyrights or patents from lotteries or lottery-like undertakings as well as competitions from usufruct from foundations Capital benefits from pensions and lump sum cash settlements under OASI /IV. 3 A supplementary assessment shall only be applied if the taxable income not subject to es is at least CHF 2 500 or if the taxable total assets are a minimum of CHF 200 000. 4 Should these limits not be met, es deducted on income from assets, lotteries, lottery and pool wins shall be reimbursed upon request. The same applies to the reimbursement of foreign es on income from securities in accordance with the relevant provisions under the double taxation agreement. 5 It is possible to do without a supplementary assessment if the preconditions for a retrospective assessment are given. B. Registration of taxpayers subject to supplementary assessment I. Local tax office 6 If the local tax office determines that a taxpayer shall be subject to supplementary assessment, the local tax authority shall enter the taxpayer under tax category 6 Q in the Cantonal Tax Register as from the respective tax period. 7 The local tax office notifies the Direct Federal Tax Division in accordance with the instruction of the Cantonal Tax Office to the local tax offices on the registration of transfers. This notification is marked with the red stamp "supplementary assessment". 8 The assessment municipality is the municipality where the taxpayers had their domicile or residence according to tax law on 1 January of the year, in case of the transfer to the Canton at the beginning of tax liability, domicile or residence. 9 Direct Federal Tax Division The Direct Federal Tax Division completes the register it keeps based upon the information of the local tax offices. 10 Upon receipt of the tax return, the Direct Federal Tax Division establishes a set of forms for the assessment record. It submits the tax return together with the sorted assessment record every month to Assessment Division 6.
C. Implementation of the tax return procedure I. Obligation to file a tax return 11 Taxpayers subject to supplementary assessment have to provide a complete, filled in tax return in accordance with the provisions applicable to a regular procedure of their own accord and declare their total income and assets, even if the municipality failed to forward the tax return forms. Service of the tax forms 1. In general 12 Every year, the Tax Office of the assessment municipality performs the supplementary tax return procedure until the end of liability to, or, in case the preconditions cease to exist, until revocation by the Cantonal Tax Office. 13 In addition, the provisions according to the request to file a tax return and the clearing requests and the instruction of the Department of Finance on the tax return procedure shall apply. 2. Designation of the tax return 14 The tax return shall be marked with a red stamp "supplementary assessment for " as well as in the address field with the indication "tax category 6Q". The local tax office shall also note the rates on the tax return. D. Delivery to the Cantonal Tax Office 15 The local tax office transfers the tax return received every month (in case of departure immediately) to the Direct Federal Tax Division after having checked it in accordance with the instruction of the Department of Finance on the assistance of the local tax offices regarding the preparation of the tax assessment. E. Assessment procedure I. Competence 16 The assessment shall exclusively be done by Assessment Division 6. Cantonal and municipal taxes 1. tax a) Assessment basis 17 The following items shall be identified: Taxable incomes not subject to (NW); s determining the rate. b) Determination of the taxable income not subject to 18 19 The tax law shall apply mutatis mutandis for the determination of the taxable income not subject to. The supplementary income shall only be reduced by deductions directly connected with it. 20 Deductions of es already made shall not be considered for the determination of the taxable supplementary income. Such deductions no longer to be considered include support or maintenance, childcare costs, interest on loans, alimony paid for divorced or separated spouses or child support, expenses due to illness, accident or invalidity, contributions to recognised forms of
restricted pension provisions (pillar 3 a); cf. instruction of the Department of Finance in respect of the application of es for foreign employees, ZStB no. 28/050, margin numbers 45-50). 21 A maximum of CHF 1 000 on interest rates on savings deposits (Section 31 subsection 1 lit g tax law) and the costs for asset management (Section 30 subsection 1 tax law) shall be considered in terms of asset earnings. 22 If one of the spouses is taxed on his income from gainful employment in accordance with tariff C and the income from gainful employment of the other spouse is assessed as a supplementary income, half of the insurance premiums (Section 31 subsection 1 lit. g tax law) shall be taken into account for that income. 23 The special deduction on gainful employment of both spouses (Section 31 subsection 2 tax law) shall be deducted on a pro rata basis if the income from gainful employment of the wife is subject to supplementary assessment. 24 If, on the other hand, the income from gainful employment of the husband is subject to supplementary assessment, the special deduction shall not be granted. c) Determination of the income determining the rate 25 The provisions of the tax law shall govern the determination of the income determining the rate. d) Social security deductions 26 If spouses are taxable under tariff C for their income from gainful employment and the wife's income from gainful employment is assessed as a supplementary income, no social security deductions shall be granted. 27 If, on the other hand, the husband's income from gainful employment is assessed as a supplementary income, social security deductions shall be granted on the total net income in full and on a pro rata basis in respect of the taxable net supplementary income. 28 Should es in accordance with tariff A or B be levied, no social security deductions shall be considered for the determination of the taxable income not subject to or for the income determining the rate. 29 The same applies to taxable supplementary incomes not taxable due to income from self-employed or non-self-employed gainful employment, irrespective of the tariff applied. 2. Property tax 30 The following items shall be identified: Taxable assets; Assets determining the rate. 31 I The determination of taxable assets and of the assets determining the rate shall be subject to the provisions of the tax law. Direct federal tax 1. Bases for the tax assessment 32 The following items shall be identified: Taxable income not subject to (NW); determining the rate. 2. Determination of the taxable income not subject to and of the income determining the rate 33 The provisions applicable to cantonal and municipal taxes (cf. margin numbers 18 to 29) shall apply mutatis mutandis to the determination of income not subject to and to the income determining the rate.
F. Taxation I. Cantonal and municipal taxes 34 The provisions of the tax law and its implementing provisions in respect of the levying of taxes shall apply mutatis mutandis. 35 In case of a supplementary assessment done for the first time, the local tax office shall determine the factors applicable to the provisional tax bill on the basis of the appended examples of a tax computation and according to the provisions of the present instruction. 36 37 Persons subject to supplementary assessment shall not be subject to poll tax. Direct federal tax The provisions of the Federal Act on direct federal tax and the implementing provisions shall apply mutatis to taxation. 38 In case of a supplementary assessment done for the first time, the local tax office shall determine the factors applicable to the provisional tax bill on the basis of the appended examples of a tax computation and according to the provisions of the present instruction and shall notify the Direct Federal Tax Division thereof on the dedicated record. G. Termination of liability to 39 Should foreign employees have obtained the permanent residence permit or if they have married a Swiss citizen or a spouse holding a permanent residence permit, the beginning of taxation in an ordinary procedure (the first day of the month following the event) shall be noted on the tax return, and as from that date the provisional taxation shall be done with the regular register. H. Final provisions 40 The instruction enters into force on 1 January 1999. 41 The instruction of the Department of Finance on supplementary assessment in respect of the collection of es of 20 January 1995 is repealed. 42 The repealed prescriptions remain applicable to the assessment for the fiscal years up to and including 1998. Appendix I. Cantonal and municipal taxes The examples given as to the tax assessment and computation are based upon a married couple with one child subject to withholding tax. Example 1 of a tax computation ( from movable property) from non-self-employed gainful employment (net wage II in accordance with the salary certificate) is CHF 60 000. Security portfolio (savings agreements) of CHF 250 000, asset earnings of CHF 12 500.
from non-self-employed gainful employment (subject to ) 60 000 0 Yield from securities and credit 12 500 12 500 72 500 12 500 Deduction Professional expenses (3 500) 0 Contributions to personal pension provisions (pillar 3 a) (2 500) 0 Insurance premiums (5 300) (1 000) Asset management costs (750) (750) Net income 60 450 10 750 Social security deduction 0 0 60 450 10 750 Taxable income not subject to CHF 10 700 determining the rate CHF 60 400 Assets Taxable assets Zürich CHF 250 000 Assets determining the rate CHF 250 000 Tax rate in case of CHF 60 400 = 3.903 % simple cantonal tax for CHF 10 700 at 3.903 % CHF 417.60 Property tax tariff VT: Tax rate at CHF 250 000 = 0.228 simple property tax of CHF 250 000 at 0.228 CHF 57.00 Example 2 of a tax computation (Pools win) from gainful employment subject to (net wage II in accordance with salary certificate) CHF 60 000. Pools win CHF 18 000. Tax deductible occupational expenses amount to CHF 500. from non-self-employed gainful employment (subject to ) 60 000 0 Sports betting win 18 000 18 000 78 000 18 000 Deduction Professional expenses (3 500) 0 Contributions to personal pension provisions (pillar 3 a) (2 500) 0 Insurance premiums (5 300) 0 Sports bets (500) (500) Net income 66 200 17 500 Social security deduction 0 0 66 200 17 500 Taxable income not subject to CHF 17 500 determining the rate CHF 66 200
Tax rate for CHF 66 200 = 4.175 % simple cantonal tax for CHF 17 500 at 4.175 % CHF 730.60 Example of a tax computation 3 (Full old-age pensions) from gainful employment subject to (net wage II in accordance with salary certificate) of the husband totals CHF 60 000. The wife receives full invalidity pension of the SUVA of CHF 14 400 due to an occupational accident as well as a corresponding OASI pension of CHF 8 400. She is no longer able to be gainfully employed due to the occupational accident she had suffered. of the husband from non-self-employed gainful employment (subject to in accordance with B1 tariff) 60 000 0 IV pensions of SUVA, 100% taxable 14 400 14 400 IV-OASI pensions of CHF 8 400, 100% taxable 8 400 8 400 82 800 22 800 Deductions Professional expenses of husband (3 500) 0 Contributions to personal pension provisions (pillar 3 a) (2 500) 0 Insurance premiums (5 300) 0 Net income 71 500 22 800 Social security deduction 0 0 71 500 22 800 Taxable income not subject to CHF 22 800 determining the rate CHF 71 500 Tax rate for CHF 71 500 = 4.384 % simple cantonal tax for CHF 22 800 at 4.384 % CHF 999.55 Example of a tax computation 4 ( from gainful employment paid from abroad) Example of a tax computation 4.1 ( from gainful employment paid from abroad of the husband) Non-self-employed income from gainful employment subject to (net wage II in accordance with salary certificate) of the wife totals CHF 43 700, the one of the husband transferred from Italy to Switzerland for work performed in Switzerland totals CHF 60 000. Contributions to pillar 3 a total CHF 3 500, CHF 2 500 thereof for the husband. of the wife from non-self-employed gainful employment (subject to according to tariff C) 43 700 0 of the husband 60 000 60 000 103 700 60 000 Deductions Professional expenses of the wife (3 200) 0 Professional expenses of the husband (3 700) (3 700)
Contributions to personal pension provisions: - (Pillar 3 a) of the wife (1 500) 0 - (Pillar 3 a) of the husband (2 500) (2 500) Insurance premiums (5 300) (2 650) Special deduction (Section 31 subsection 2 tax law) (1) (5 200) 0 Net income 82 300 51 150 Social security deduction (1 child) (2) (5 400) (3 356)* 76 900 47 794 Taxable income not subject to CHF 47 700 determining the rate CHF 76 900 * Calculation of social security deductions on a pro rata basis: 5 400 x 51 150 : 82 300 = 3 356 Tax rate for CHF 76 900 = 4.568 % simple cantonal tax for CHF 47 700 at 4.568 % CHF 2 178.90 1) 2) see instruction on supplementary assessment, margin number 24 see instruction on supplementary assessment, margin number 27 Example of a tax computation 4.2 (Wife's income from gainful employment paid from abroad) Basically the same as in example 4.1, the difference being that in this case, the wife's income is subject to supplementary assessment (please consider in particular the differences concerning special and social security deductions). of the husband from non-self-employed gainful employment (subject to in accordance with tariff C1) 43 700 0 of the wife 60 000 60 000 103 700 60 000 Deductions Professional expenses of the husband (3 200) 0 Professional expenses of the wife (3 700) (3 700) Contributions to personal pension provisions: - (Pillar 3 a) of the husband (2 500) 0 - (Pillar 3 a) of the wife (1 500) (1 500) Insurance premiums (5 300) (2 650) Special deduction (Section 31 subsection 2 tax law) (1) (5 200) (3 009)* Net income 82 300 49 141 Social security deduction (1 child) (2) 0 0 82 300 49 100 Taxable income not subject to CHF 49 100 determining the rate CHF 82 300 * Calculation of special deduction on a pro rata basis: 5 200 x 60 000 : 103 700 = 3 009 Tax rate for CHF 82 300 = 4.752 % simple cantonal tax von CHF 49 100 at 4.752 % CHF 2 333.20 1) 2) see instruction on supplementary assessment, margin number 23 see instructions on supplementary assessment, margin number 26 Example of a tax computation 5
(Real estate: imputed rental value and interest on loans, asset earnings) from non-self-employed gainful employment (net wage II in accordance with salary certificate) is CHF 80 000; security portfolio totals CHF 70 000, asset earnings total CHF 3 500. The imputed rental value of the real estate after deduction of maintenance costs is CHF 15 500, property tax value CHF 380 000. There is a mortgage on the house of CHF 300 000. The interest on loans totals CHF 13 500. from non-self-employed gainful employment (subject to ) 80 000 0 Imputed rental value, net after deduction of maintenance costs 15 500 15 500 Asset earnings 3 500 3 500 99 000 19 000 Deduction Professional expenses (6 700) 0 Contributions to personal pension provisions (pillar 3 a) (5 000) 0 Interest on loans (13 500) (13 500) Insurance premiums (5 300) (1 000) Asset management costs (210) 210) Net income 68 290 4 290 Social security deduction (1 child) 0 0 68 290 4 290 Taxable income not subject to CHF 4 200 determining the rate CHF 68 200 Assets Security portfolio 70 000 Property tax value for real estate 380 000./. mortgage debt (300 000) 150 000 Taxable assets Zürich CHF 150 000 Assets determining the rate CHF 150 000 Tax rate for CHF 68 200 = 4.258 % simple cantonal tax for CHF 4 200 at 4.258 % CHF 178.80 Property tax tariff VT: Tax rate for CHF 150 000 = 0.046 simple cantonal tax for CHF 150 000 at 0.046 CHF 7.00 Direct federal tax The assessment examples for cantonal and municipal taxes shall also apply mutatis mutandis to the direct federal tax. For deductions, the different rates according to DFTA need to be considered.