Law & Numbers - News Tax

Switzerland: expatriate’s professional tax deductions will be revised.


Expatriates: the Ordinance related to the expatriate’s professional tax deductions will be revised.

Expatriates: the Ordinance related to the expatriate’s professional tax deductions will be revised.

Specific expatriate deductions are the effective costs – or a lump sum deduction – of moving expenses, travel expenses to home country, housing allowances, private school fees, effective costs or lump sum deduction.

According to the proposed revised Ordinance, the same deductions should be maintained but at some more restrictive conditions. Among others, the qualification of expatriates will be restricted, housing allowances granted only if the home country house is not rented out, school fees only for foreign language private school.

Stock Options: the social security authority issued new guidelines on how imported / exported employee stock options are to be treated for Swiss social insurance purposes. The approach is similar to the one adopted by the tax authorities so that the imported/exported options are taxable on a prorata basis calculated on the vesting period. The difference will be that the tax domicile during the vesting period is determinant for tax purposes, while the place of the social security contributions during the vesting period will be determinant from social security point of view. This is not necessarily the country of domicile because in case of foreign assignments an individual can continue to be subject to home country on the basis of an assignments certificate.

The new rules apply from January 1, 2014, but also to stock options granted as of January 1, 2013 or granted before in previous years, on which social security contributions have to be paid – after 31 December 2012.

If the stock options have been settled differently than the new approach during the above period, it should be clarified whether an adjustment should be made.

Ariane Schurink-Mottier
CFT Services & Partners SA

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