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Re: swiss-list: Double Taxation Switzerland and USA / Social Security

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Re: swiss-list: Double Taxation Switzerland and USA / Social Security

From: Ralf Kubli <click for textversion of email address >
Date: Tue, 13 Apr 2004 22:09:14 -0400
X-Mailer: Apple Mail (2.613)


-AVS: you can only be dispensed from paying ss in the US if your
employer pays for avs in switzerland. there is a form for this that
your employer has to fill out. Usually this is done by large CH
companies, (sulzer, abb, ubs, etc.) if you work for a US company or
are not here as a transferee, you have to pay ss.

-there is an agreement for the recognition of your ss payments if you
ever return to CH. there should be plenty of information in the
archive of the swiss list on this. in short: you pay ss in the US,
for at least 18months, you return to CH and they recognize the years
that you have contributed SS at 50% in CH.

-I personally think you should save the money you pay into the AVS
while in the us and invest it in CH, you can make some calculation that
shows easily that you loose out on paying 9.something percent. Per
year that you do not pay avs in CH you loose 1/42 (or whatever the
required years of contribution are for a full benefit (rente). if you
contribute in the US to ss and go back to CH, they count your
contribution time at 50%, so you actually only loose 1/84 of your
maximum benefit times the years you did not contribute in CH (as long
as you pay SS).
If you can afford to pay the 9.6% (or what it is) of AHV on your pretax
salary and pay Social security and live in Manhattan then I would like
to know which company you work for and maybe they have a job for
Just make the rough calculation, you live 25 years after retirement:
you don't pay avs in ch, and lose 2.3% of an assumed monthly benefit of
2000CHF= CHF46 lost per month X12=552x25=13800CHF lost of AHV payments
per year you did not pay avs in CH. but this is money paid to you in
30 or 40 years over a 25 year period, so you discount it back to todays
worth of money and you look at what you pay now: let's say you have an
income of 50 K and pay 9.6% of pretax dollars of voluntary avs: $50000
x9.6%= 4800USD/per year you pay to Geneva.
If you take this money and put it in a decent investment today and wait
until you are 65, it will be worth a lot more than the 13800CHF that
you potentially loose over 25 years (if you happen to live 25 years
after retirement, or if you still care what income you have with 88 ;))
by not paying avs for a few years.

Not to mention the fact that if you still believe the avs will still be
looking the same in 30 years as it is now with the dramatic demographic
changes happening, then you must have very strong faith in the swiss
economy to be able to bear the burden of paying avs to all the old
people without having any population growth by births or immigration.

-every resident in the US has to pay taxes, unless you are not a
resident, or work on a cash basis, which we can assume half of this
city operates on and a large part of the country does as well.

Check out the archive in swiss list on this subject as well.

I am sorry if I have bored some of you again (if you even got that far
reading) with the above elaborations, but as you can see, there is some
reasoning behind not paying voluntary avs in CH while paying SS in the



On Apr 12, 2004, at 16:07, Laetitia Hirschy wrote:

> Hi,
> I understand that there are treaties between Switzerland and the US,
> so that
> you don't have to pay social security in both countries. How does this
> work?
> I currently live and work in NYC and pay social security here (which is
> deducted from my salary at the end of each month) and AVS back at home
> in
> Geneva. I'd like to know how I can go ahead and be exempt from paying
> soc.
> sec taxes here and keep paying AVS in Switzerland since I intend to go
> back
> to CH at some point? Is there any other taxes that we are exempt from?
> I
> heard that Chinese citizens don't have to pay taxes in the US because
> they
> have most-favored nation status with the US, do we have anything like
> that?
> Thanks,
> Laetitia

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Received on Wed Apr 14 2004 - 02:36:40 PDT

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