Source tax on a B permit: when you must file a Swiss return

Moving to Geneva on a B permit usually means your first encounter with the Swiss tax system is a line on your payslip rather than a form in your letterbox. Your employer deducts tax directly from your gross salary and pays it over to the cantonal tax administration on your behalf. No return, no deadline, nothing to sign.

That mechanism is called source tax (impôt à la source in French, Quellensteuer in German). It is convenient, and for a while it is often close enough to accurate. But it is not the whole story. Depending on your income, your assets and your property situation, Swiss law may oblige you to file a full tax return anyway, or may allow you to ask for one. And that second decision, once taken, cannot be reversed.

This article covers the position of a resident foreign national holding a B permit in the canton of Geneva. It is deliberately not written for cross-border commuters on a G permit, whose rules are different and are set out separately below.

What source tax is, and who it applies to

Source tax applies to foreign employees who are resident in Switzerland and do not hold a C permit, the settlement permit (art. 83 LIFD, the federal act on direct federal taxation, and art. 32 LHID, the federal act on the harmonisation of direct taxation).

In practice, if you live in Geneva on a B permit and work as an employee, tax is withheld at a scale rate that already builds in a standardised set of deductions. That scale is an average. It does not know that you paid into a pillar 3a retirement account, that your professional expenses are unusually high, that you support a dependent relative, or that you carry childcare costs.

The gap between the standard scale and your actual situation is precisely why Swiss law provides a second route: the subsequent ordinary assessment, known in French as the taxation ordinaire ultérieure and almost always shortened to TOU. Under a TOU you file a full Swiss personal tax return like any other resident taxpayer. The source tax already withheld is not lost: it is treated as an advance payment and credited against the final tax calculated on your return.

B permit resident or G permit commuter: the distinction that changes the rules

International arrivals in Geneva often hear advice that was actually written for cross-border commuters, who live in France and work in the canton. The two situations are governed by different tests, so mixing them up is one of the most common sources of confusion we see.

If you are a Geneva resident, the left-hand column is your column. The quasi-resident concept, which comes up constantly in forum threads and expat groups, is a route for non-residents and is not the test that applies to you.

When filing becomes compulsory

As a Geneva resident taxed at source, a TOU is mandatory if any single one of the following applies:

1. Your gross income reaches or exceeds 120'000 CHF.
2. You have taxable wealth.
3. You own real estate in the canton of Geneva.
4. You were already subject to a subsequent ordinary assessment for the previous tax year.

Three points are worth stressing here.

First, these conditions are alternatives, not cumulative. Owning a flat in Geneva puts you into the ordinary system even if your salary is well below the income threshold.

Second, the income test looks at gross income, before the deductions that people mentally apply when they think about what they earn. A salary that feels comfortably under the line on a net basis can sit above it on a gross basis, particularly once bonuses, allowances and benefits in kind are counted.

Third, condition 4 is not a description of a state of affairs so much as a mechanism. Once a TOU has applied to you once, it keeps applying. We return to this below, because it is the point that catches people out.

When filing is optional

If none of the compulsory conditions is met, you are not obliged to do anything. Source tax withheld at the scale rate is your final Swiss tax, and the year is closed.

You may nevertheless request a subsequent ordinary assessment voluntarily. The purpose of doing so is to claim your actual deductions and effective expenses rather than accept the flat assumptions baked into the withholding scale. Depending on your personal circumstances, the categories typically at stake include retirement savings contributions, pension buy-backs, certain professional expenses, maintenance payments, childcare costs, debt interest and qualifying medical expenses.

Whether any of these actually improve your position is a question of arithmetic, not of principle. A voluntary TOU can produce a refund. It can equally produce a bill, because the ordinary assessment recalculates your tax from the ground up and takes account of income the withholding scale never saw, such as investment income or foreign assets. Nobody, including us, can tell you the outcome without running the numbers on your actual figures.

The deadline: 31 March of the following year

The request is made by completing section 2 of the DRIS/TOU form and sending it to the cantonal tax administration no later than 31 March of the year following the tax year concerned.

That is the operative date to diarise. If you want a voluntary assessment for a given tax year, the request has to be with the administration by that point.

The double trap: two things that cannot be undone

This is the part of the mechanism that deserves the most attention, and the part that is most often skipped in casual advice.

First trap: the request itself is final. Once you have submitted a request for a subsequent ordinary assessment, you cannot withdraw it and return to the source tax scale. That holds whatever the final assessment shows. If the ordinary calculation produces a higher tax charge than the withholding scale would have, that higher figure stands. There is no right to change your mind once the outcome is known.

Second trap: it is not a one-year decision. From the moment you move into the ordinary assessment system, whether by request or because a compulsory condition was triggered, you remain subject to subsequent ordinary assessment for all future tax years, until your liability to source tax comes to an end.

Put together, these two rules mean a voluntary request is a structural choice about how you will be taxed for the rest of your time on a source-taxed permit, not a one-off attempt to recover a refund. A year in which the deductions are attractive may be followed by years in which they are not, and you will still be filing.

How to approach the decision

A sensible sequence looks like this.

• Establish which column you are in. Resident on a B permit, or non-resident commuter. Everything else follows from that.
• Test the compulsory conditions first. If one of them applies, there is no decision to make: you file, and the question becomes how to file well rather than whether to.
• If the decision is genuinely yours, model it before committing. Compare the source tax actually withheld against a realistic ordinary calculation, including income that the withholding scale does not capture.
• Look beyond the current year. Given the permanence rule, the right question is not only whether this year improves, but whether the ordinary system is likely to suit your situation over the medium term. An expected change in income, family situation, property purchase or move towards self-employment all matter here.
• Watch the calendar. The 31 March deadline is the practical constraint, and it arrives quickly for people who only start thinking about tax when their first Swiss payslips have already been filed away.

Two situations deserve particular care. If you own or are about to buy property in the canton, the compulsory rule will apply regardless of your income, so the planning question is about timing and preparation rather than choice. And if you are moving from employment towards independent activity, the tax picture changes shape entirely, which is worth mapping out at the same time as the structure of the business itself.

Where we can help

Our team handles source tax positions and Geneva tax returns for international residents every year, including the projection work that should come before an irreversible request. If you are unsure which side of the line you fall on, or you want the comparison run properly before 31 March, our tax advisory service covers exactly this, and you can get in touch with Klear to discuss your situation.

This article provides general information on Swiss and Geneva tax rules and does not constitute individual tax advice. Rules, thresholds and administrative practice can change, and the correct treatment always depends on your personal circumstances. For a decision as final as a request for subsequent ordinary assessment, obtain advice on your own file from a Swiss CPA or from the cantonal tax administration before acting.