Current topicsStay up-to-date

Are you ready for the new withholding tax regulations in 2021?

What are the consequences of the revised Withholding Tax Act, which comes into effect at the beginning of 2021? Learn the most important facts in a compact summary and get to know the Abacus timetable.

On January 1, 2021, the revised withholding tax law will enter into force with Ordinance and Circular Letter No. 45. The regulations on withholding tax were amended because they did not comply with the obligation of equal treatment under the agreement on the free movement of persons between Switzerland and the European Union (EU) or between Switzerland and the European Free Trade Association. Employers, authorities and insurers (person liable for the tax payment, SSL) must be familiar with the new regulations and implement them as of 2021. Although withholding tax is a tax liability of the employee, the employer is liable for its correct delivery.

Summary of the most important points
The regulations concerning the different procedures to be followed by the withholding tax payer have been adapted. The calculation of withholding tax has been changed. The monthly and annual models must be consistently applied in the respective cantons. In addition, the SSLs must deliver withholding taxes in all relevant cantons. This is contrary to current practice, where some employers pay withholding taxes to the canton of employment.

Other important changes:

  • The withholding tax settlement  is now always settled with the place of residence or domicile
  • The tariff code D (sideline) will be eliminated.
  • Other employment with other employers and/or other substitute income must be included in
  • The withholding tax calculation
  • For irregular hourly wage earners a uniform QST rate applies
  • The entitlement provision will be reduced to 1-2%.
  • The requirements for filing a tax return (NOV) have been modified and expanded

What do you have to consider as an Abacus user?
The circular letter explains the calculations in detail and provides numerous examples, including those involving a change of canton. Changes to tariff codes, change of residence, etc. must always be implemented in the following month. Employers should ask themselves the following questions:

  • Who has to file a settlement? There are no significant changes here.
  • For whom must the employer settle accounts? There are no changes here.
  • What is subject to withholding tax, i. e. what is the withholding tax base? There are some changes here.
  • When is a source of income withholding tax liable? Here there are some clarifications.
  • In which canton and with which tariff must the withholding taxes be paid? There are some changes depending on the current situation.
  • How is the calculation performed? Are there exceptional cases and special rules? The most significant changes are in the determination of the rate.

Abacus Time Table
The new regulations will be released with the Abacus versions 2019, 2020 and 2021. In order to give you enough time to implement the legal requirements, we will gradually integrate the new features. We will start with the base values and adjustments in the personnel base data (e.g. the level of employment over several employment contracts or the effective working hours for hourly wages), then implement the calculation and finally dialogues, evaluations and other adjustments.
The functions are scheduled for the following dates:

Version 2020

  • Release February 2020 - Release of base values and  personnel base data
  • Service Pack May 2020 - Release of the new calculations
  • Service Pack September 2020 - Release of dialogues, evaluations and other adjustments.

Version 2019

  • Service Pack March 2020 - Release of base values and  personnel base data
  • Service Pack October 2020 - Release of dialogues, evaluations and other adjustments.