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You are here: Home Finance & Business Tax Tax tips for US expats in Switzerland

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24/11/2009Tax tips for US expats in Switzerland

Tax tips for US expats in Switzerland Financial planner Jonathan Lachowitz offers 16 tax tips for US citizens living in Switzerland.

Jonathan Lachowitz, an American expat and founder of White Lighthouse Investment Management in Lausanne, offers 16 tax tips for US citizens living in Switzerland.

The following list of tips is intended to help American citizens overseas, but readers are advised to contact a US tax, investment or legal professional before making personal financial decisions:

  • Pension buy-backs to reduce Swiss taxes may increase your US taxes. Check in advance to avoid double taxation.
  • Hire an experienced US tax advisor who is specialised in working with overseas Americans.
  • Make sure your Swiss asset manager knows the US tax implications of passive foreign investment companies (PFICs, generally most non US investment funds). Income taxes on the gains can easily go over 50 percent. They should also understand income, capital gains, estate, gift, dividends and interest taxes. 
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  • Taking mortgages in currencies other than the US dollar can incur tax risks, especially when the dollar is weak.
  • Your employer contribution to 2nd pillar should be reported as income on your annual US tax return.
  • Inheritance law is different in Switzerland than in the US. A non-Swiss can elect to have home country regulations apply.
  • Consider equity investing in the US for better tax reporting and lower fees.
  • Don't buy non-US-compliant life insurance.
  • Keep a US credit card to retain your credit rating; request an annual copy.
  • If you have a non-US spouse, learn the rules of inter-family gift limitations for US tax purposes.
  • Keep good records on 2nd pillar contributions reported on US tax returns to help avoid double taxation in the US.
  • Starting a non-US company requires additional US tax reporting.
  • Don't deposit money in non-US investment funds to avoid punitive US tax rates.
Umbrella
For further reading, Lachowitz recommends the following finance books:
The Financially Intelligent Parent, Eileen and Jon Gallo
The Wealthy Barber, David Chilton
Raising Money Smart Kids, Janet Bodnar
How to Ruin your Financial Life, Ben Stein.

Text by Jonathan Lachowitz CFP (Switzerland and USA) and founder of White Lighthouse Investment Management in Lausanne, Switzerland. Lachowitz earned an MBA from New York University's Stern School of Business and has lived in Switzerland for almost 15 years.

This article was first published in L’agefi.


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