More than 17,000 Americans live in Switzerland and have trouble getting services from Swiss banks following a tax dodging scandal in the U.S. Now, they may be in for tax relief.
U.S. citizens in Switzerland have been a casualty of cooling banking relations for Swiss banks – Americans are undesirable since U.S. officials began cracking down on firms which cater to Americans with offshore accounts. The banks have made little distinction between the wealthy American tax dodgers and cheats and the more than 17,000 Americans who live, work and pay taxes in Switzerland.
Americans in Switzerland have increasingly been shut out of basic investments, as banks like UBS freeze Americans out of pension schemes or added value services like «Safe,» a digital lockbox for valuables.
Under U.S. tax law, Americans drawing a salary above roughly $100,000 abroad are taxed both at home and abroad on the income above that threshold.
Six-Figures Salaries
In high-income locations like Switzerland, multinational firms like Nestle, Roche, Novartis and UBS frequently recruit in the U.S. for specialist and executive staff they can't find domestically. Many of the Americans in this bracket draw down more than six-figures Swiss franc salaries (the country's average salary is about 60,000 Sfr, or $60,569).
Now, the American high-earners may be in for a tax break under ongoing tax legislation being proposed by the Republican party. Influential U.S. congressman Kevin Brady told the «Financial Times» (behind paywall) that lawmakers are taking seriously calls from expat groups to shift from a citizen-based income tax to a residence-based one – meaning tax is only levied on income earned in the U.S.
Brady, who runs the committee drafting the tax bill, said that a citizens abroad group had made the case to committee. Republicans are undertaking the most broad-sweeping tax reform since 1986, under Ronald Reagan.
