Revised provisions on tax deductions for expatriates will apply from start of 2016
Bern, 16.01.2015 - The Federal Department of Finance (FDF) has revised the Expatriates Ordinance and resolved to bring it into force on 1 January 2016. Following the revision of the ordinance, expatriates will be more narrowly defined as a group of people. Moreover, the revised ordinance defines the structure of individual deductions. In principle the deductions will be retained, but their acceptance should be improved by the amendments to the ordinance.
Expatriates are defined as senior employees and specialists with special professional qualifications who are sent to Switzerland temporarily by their foreign employer. In order to be deemed an expatriate, the temporary posting is now decisive also for specialists.
In future, expatriates' housing costs will deductible only if a dwelling abroad is permanently maintained for their own use. Moving costs are deductible only if they are directly related to the move. Private school tuition costs are deductible for minors, for children with a foreign mother tongue attending a foreign language private school, provided that public schools do not provide tuition in the child's native language. Costs relating to food, transport and supervision before and after classes are not deductible.
In 2009, a parliamentary initiative (09.3528) called for the legality of the Expatriates Ordinance to be examined. A legal opinion from the Federal Office of Justice (FOJ) basically confirmed its constitutionality and legality. However, the FOJ recommended that the provisions on deductions relating to private school costs and removal costs should be correspondingly stated more precisely during the next legislative revision. Subsequently, the abolition of the deductions was called for in two other parliamentary initiatives (12.3510 and 12.3560). However, the Council of States rejected these initiatives. The Federal Council also considered these deductions to be justified in principle but instructed the FDF to examine the prerequisites and procedures for the individual deductions. On the basis of this examination, several clarifications were recommended for the ordinance, and these were widely accepted in the hearing conducted in spring 2014.
Address for enquiries
Cédric Maschietto, Lawyer/Federal Tax Administration FTA
Tel. 058 462 73 91 79, firstname.lastname@example.org
- Revidierte Verordnung über den Abzug besonderer Berufskosten bei der direkten Bundessteuer von vorübergehend in der Schweiz tätigen leitenden Angestellten, Spezialisten und Spezialistinnen (Expatriates-Verordnung, ExpaV) (PDF, 26 kB)
Federal Department of Finance