The law distinguishes between “residents” and “non-residents” in Switzerland.

“Residents” (e.g. residence permit B)

Art. 9 Withholding Tax Ordinance (only in German, French oder Italian)

If you earned a gross amount of CHF 120,000 or more in one year, you will be assessed retrospectively. This means that you first pay the tax at source, but this is subsequently revised through an ordinary tax procedure (with the submission of a tax return). Within the framework of this subsequent ordinary assessment, you can deduct your payment into pillar 3a.

If you earn less than CHF 120,000 gross, you will not automatically be assessed retrospectively. Until now, you could apply for a retrospective rate correction of the withholding tax for the 3a deduction. This retrospective rate correction is no longer possible from the 2021 tax year. However, you can now voluntarily apply for a retrospective ordinary assessment. You must observe the following points:

  • The application for a retrospective ordinary assessment must be submitted by 31 March of the year following the tax year.
  • If you are subject to a subsequent ordinary assessment, this system also applies to the following years (until the end of the withholding tax liability in Switzerland).

A retrospective ordinary assessment can lead to both a higher and a lower tax burden. You should therefore clarify in advance whether it is worthwhile for you to switch to the retrospective ordinary assessment because you can deduct the payment into pillar 3a or voluntary purchases into the pension fund.

“Non-residents” (e.g. weekly residents)

Art. 14 Withholding Tax Ordinance (only in German, French oder Italian)

Also for persons without tax residence in Switzerland (e.g. cross-border commuters to Germany with a weekly stay in Switzerland), a subsequent tarrif correction of the withholding tax is no longer possible from the tax year 2021.

Weekly residents can now also be subject to retrospective ordinary assessment. However, this is only the case if they generally earn and pay tax on at least 90 per cent of their worldwide income in Switzerland. Then they are considered “quasi-residents” by law.

As with residents, the question arises as to whether a subsequent ordinary assessment is worthwhile. Unlike residents, however, quasi-residents have the option of deciding each year new whether they want a subsequent ordinary assessment or not (cf. page 669 of the dispatch). This does not automatically apply to subsequent years as well.