Compliance by Country: Switzerland

Francisco Antunes Switzerland Luzern

As Recruit 121 Limited places candidates across the globe, our monthly ‘Compliance by Country’ series aims to provide information that candidates need to consider in order to ensure that they fully comply with the rules/requirements of working in different countries.

We previously shared with you tips on compliance in The Netherlands. In the second blog of the series Helene Truffa, Swiss labour leasing specialist at employment experts Capital Consulting, provides answers to frequently asked questions for contractors working in Switzerland

What are the residency rules/requirements in Switzerland and how does one go about registering if required to do so? EU nationals are required to apply for a work permit prior to starting the assignment in Switzerland. The rules around the work permits are dependent upon the worker’s personal circumstances; there may be a requirement for the worker to register at the local commune/municipality at arrival, or if returning back to the home country every week, the employer can apply to a cross border permit in which case the registration is managed by the employer. Always seek local professional advice before starting an assignment and before registering in Switzerland.

Do I need to move from a limited company to an umbrella company? When working in Switzerland, the use of a non-local registered limited company is prohibited in most circumstances. Only a Swiss licensed recruitment agency or Swiss payroll provider will be in a position to provide a compliant employment framework for your contract. Income tax and mandatory social contributions (including Swiss private pension) will be deducted at sourced and managed on your behalf by the licensed entity.

What are the income tax and social security rates in Switzerland? Income taxes vary from Canton to Canton, and typically are due at your primary place of residence in Switzerland. Personal circumstances such as marital status and number of dependants also influence the tax calculations, as well as the level of monthly income. As for the social contributions, these include pension, unemployment insurance, accident insurance and other mandatory components; the level of social charges levied vary based on your age and gender.

Are you able to give an indication of the legitimate tax allowances available to expatriates? Currently, expatriate workers who maintain their centre of vital interests abroad can deduct the cost of secondary accommodation and international travel from Swiss income tax. Many companies also offer the option of deducting from the monthly gross taxable a lump sum of CHF 1,500 which is meant to cover the standard double costing of accommodation and travel when working temporarily in Switzerland.

Do I need a visa to work in Switzerland? Nationals of EU and EFTA member States do not require a visa but do require a work permit prior to start working in Switzerland. With a valid employment contract, Nationals of EU and EFTA member States will be granted a work permit; non-EU/EFTA nationalities may only be admitted if no other resource is found within Switzerland or another EU/EFTA member state and the visa sponsorship needs to be made directly by the end client.

Should I keep my company registered in my home country? What are the pros and cons of this? There are multiple factors to be taken in account, such as the length of the assignment abroad, if there is any other revenue generated in the home country, the costs of maintaining the company while working abroad etc..

Before starting a contract in a location you are unfamiliar with, it is wise to seek advice on local requirements from a local expert before accepting the role, and to seek advice on home-country matters from your accountant before making the move.

For more information on freelance and permanent SAP jobs from Recruit 121, call us on +44 02920 496121 or email us at: info@recruit121.com

Recruit 121 Limited and Capital Consulting are unrelated companies, other payroll solution providers are available and contractors should take independent advice so that their individual circumstances are properly considered.

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