Income tax in Switzerland as a freelancer
May 17, 2010 | 20,00 EUR | answered by Matthias Wander
Hello,
I still have a work contract (ATZ) and residence in Germany and work simultaneously as a freelancer. Now I have been offered a project in Switzerland (duration 12 months).
Question: In which country do I have to or can I pay income tax (which is significantly lower in Switzerland than in Germany), what requirements do I need in Switzerland for this, and in this case, is my double household management in Switzerland deductible?
Thank you for the answer.
Dear inquirer,
Thank you for your inquiry, which I would like to answer based on your information and in the context of your involvement in an initial consultation.
If you still have a residence in Germany, you are subject to unlimited income tax in Germany. According to the principle of worldwide income, all income must be declared in the tax return (including income from Switzerland). However, this income is not taxed in Germany but in Switzerland if it is income from self-employment or from a commercial establishment.
Foreign income that is tax-free in Germany is subject to the progression clause, meaning it is taken into account when determining the tax rate on German income.
A double household management that is work-related can also be established abroad. A deduction for business expenses is not possible due to the provision of § 3c EStG if the income earned abroad, for example, remains tax-free in the country under a double taxation agreement. Furthermore, the double household management can only be claimed by an employee and not by an entrepreneur.
I hope my explanations have been helpful.
Sincerely,
Wander
Tax advisor
