HR update – Changes 2021/2022

Withholding taxes

Various changes entered into force on 1 January 2021 with the revision of the Withholding Tax Act.

Important information for employers on changes concerning corrections and retroactive ordinary assessment from the tax year 2021 onward:

The deadline for payroll corrections by employers is 31 March of the subsequent year.
In accordance with FTA circular no. 45, all persons subject to withholding tax - irrespective of residence status - may request a recalculation of withholding tax by 31 March of the tax year following the date on which the tax payment is due (forfeiture period).

It should be noted that the practical implementation of the recalculation may vary from canton to canton.

In addition to the above, Swiss residents liable to withholding tax may request retroactive ordinary assessment by 31 March of the following year. The request may not be revoked and this status remains in place for the following years (provided the person is subject to withholding tax and is resident in Switzerland for tax purposes). Taxable quasi-resident persons (quasi-residents are resident abroad but generate 90% of their worldwide gross income in Switzerland) may also request retroactive ordinary assessment. A new request needs to be submitted every year.

An updated version of the Guidelines for completing 2022 Salary Certificates has been published last November. The two main changes are relating to the private use of company cars and expenses related to home office.

As per 1st January 2022, the gross-up for private use of the company car is 0.9% (previously 0.8%) of the purchase price (excluding VAT) at least CHF 150 per month. The rate of 0.9% is also exclusive of VAT and includes all optional features. This percentage is a flat rate that already includes commuting costs. The box F must be ticked in any case. But the percentage of field service is no longer needed to be declared in section 15 of the salary certificate. You can find out more about this on our Blog.

There are no changes in the lump sum deductions for professional expenses or the valuation of payments in kind with regards to direct federal tax in the tax year 2022.

Cross-border commuters: COVID-19 special rules

During the coronavirus pandemic, Switzerland signed memoranda of understanding with the neighbouring countries of Germany, France, the Principality of Liechtenstein and Italy on the taxation rights of the countries concerned (treatment of non-return days, etc.). The expiry dates of these agreements are as follows:

Germany and France: will remain in force until at least 31 March 2022.
Italy: the authorities will notify Switzerland in advance if the agreement is to be terminated (may be terminated at the end of the month with a minimum of one week’s notice).
Principality of Liechtenstein: the agreement will be extended automatically if it is not terminated at the end of the month with a minimum of one week’s notice.

In principle, employees who worked or are working from home solely for pandemic-related reasons will be taxed as if they had attended their usual place of work on these days. Caution is needed due to the increasing easing of pandemic-related restrictions. We advise analysing each situation in detail.

There is no memorandum of understanding with the other countries, particularly Austria. Therefore, employers must exclude foreign working days from taxation in accordance with the OECD Model Tax Convention.

Tax rules may differ from the principles of social security liability and need to be evaluated on a case-by-case basis. We would be happy to assist you in assessing and implementing such cases.

The latest information on the impact of the coronavirus on social security in an international context is published by the Federal Social Insurance Office (FSIO) at: FSIO website – Social insurances –International social insurance – Legal bases and agreements – Coronavirus: impact on social insurance in an international context (last link not available in English).

In general, the measures to fight COVID-19 do not affect the social security liability of persons to whom the Agreement on the Free Movement of Persons or the EFTA Convention apply and for persons covered by a bilateral social security agreement. Having said this, there is no uniform Europe-wide deadline for the flexible application of the liability rules. The situation should be reviewed on a case-by-case basis for persons who are not covered by a social security agreement.

If you employ cross-border commuters from Germany, the Principality of Liechtenstein, Italy, France, and Austria, you do not need to do anything at the moment, as these rules apply until 31 March 2022 respectively 30 June 2022 BSV. Nonetheless, you should keep an eye on the situation regarding any employees concerned and examine any changes in the guidelines on home-office work, particularly if you are considering a continuation or extension of home-office work arrangements to a time after COVID-19. We would be happy to assist you on this.

Sliding-scale disability pensions

Revisions to disability insurance (IV) enter into force on 1 January 2022. This revision of the law brings specific improvements for children, young people, and people with mental health problems. In addition, several measures are being introduced to improve quality assurance and the transparency of medical opinions. The reform is also designed to enhance fairness by taking better account of the individual situations of the persons concerned. As in the past, the rules regarding the threshold for entitlement to a pension, namely a degree of disability of 40% or higher and entitlement to a full pension if the degree of disability is 70% or higher, remain unchanged. The changes in the legislation also affect the mandatory occupational pension coverage under BVG, meaning that pension funds will need to evaluate whether the new system will only be introduced for the BVG minimum or also for the above-mandatory portion. Transitional provisions are planned for existing pensions.

New social insurance agreement between Switzerland and the United Kingdom

The two countries have negotiated a new bilateral agreement which is being applied provisionally from 1 November 2021 until it officially enters into force. The new agreement will take effect definitively once the parliaments of both countries have ratified it. The new social insurance agreement goes further than the typical bilateral agreements with other countries. Many of the provisions of Regulations (EC) No. 883/2004 and (EC) No. 887/2009 have been incorporated into the agreement to ensure as much continuity with the Agreement on the Free Movement of Persons (AFMP) as possible. The new agreement covers interactions between Switzerland and the United Kingdom by citizens of both countries and EU citizens. New situations beginning after 1 January 2021 need to be re-evaluated.

BVG thresholds

As OASI pensions (maximum annual OASI pension CHF 28,680) are not changing in the new year, the BVG thresholds also remain unchanged in 2022.

	2022	Share of max. OASI pension
Pillar 2
Coordination deduction	CHF 25,095	7/8
Entry threshold	CHF 21,510	3/4
Minimum insured salary	CHF 3,585	1/8
Upper BVG salary limit	CHF 86,040	300 %
Max. insurable salary	CHF 860,400	3000 %
Pillar 3
Max. tax deduction (with Pillar 2)	CHF 6,883	24 %
Max. tax deduction (without Pillar 2)	CHF 34,416	120 %

BVG minimum interest rate

The BVG minimum interest rate remains unchanged at 1% in 2022.

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