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Question: Income Tax Rates for an American citizen working in Switzerland?

Greetings. I have been offered a position at an American company in Zurich and I am an American citizen. Since I would be working for an American co, but living in Switzerland, does anyone know what tax bracket I would likely be paying into, i.e. – would I be taxed under the US system or the Swiss system?

It seems to me that based on my expected salary, paying taxes to the Swiss gov in lieu of the IRS would be beneficial to me, but I am not sure what factors are considered when determining which nation will tax me. Also, I am not totally certain yet, but I may potentially be able to work as an independent contractor instead of an employee for this co, which I suspect may also affect the taxation status.

Any help would be appreciated. Thanks in advance.

Answer: If you work and live in Switzerland you will be taxed in Switzerland for sure.
How much you pay depends on your income and family status. Here a webpage to callculate your income tax:

http://www.comparis.ch/steuern/default.aspx

You might realize that the income tax depends highly on your canton of residence. So choose your canton of residence wisely. For example the canton of Zug is close to Zurich and has very low tax rates. In return the rents for housing are higher there. So it depends on your income if it makes sense to move to this canton.

In addition to income tax you will have to pay 5.05% of your income for social insurance and you must have a compulsory health insurance (at least 150. – CHF month) . The premium for health insurance depends on your age and the place of residence. Check this webpage for detailed calculations: http://www.comparis.ch/krankenkassen/default.aspx

If you are 25 or older you will also have to pay about 8% of your income for your pension plan. Your employer will pay the same amount. As you will get most of the money when you leave Switzerland this could be attractive for you. Pension plans vary from employer to employer. The HR department of your potential employer are experts on this and should be happy to explain you the details.

If you work as an “independent contractor” this will not have a big effect on your tax status. (It would have some impacts on your pension plan but explaining this goes beyond yahoo answers.)

As far as I know the U.S. government sometimes taxes its citizens when they work abroad although there must be an agreement between Switzerland and the U.S. to prevent double taxation. I am not very familiar with the U.S. tax system so others might answer on this aspect.

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By Belinda Serrano editor@sweetwaterreporter.com c-school board2.jpg Several topics affecting many facets of the Sweetwater Independent School District were discussed in a regular session at the monthly board meeting held on Monday evening, Dec. 13. Among those were the location of the Hobbs alternative school. At last month’s meeting, two options were presented yet no …

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