Quasi-Resident Status in Switzerland: How to pay less taxes?

Every year, thousands of cross-border workers who are taxed at source leave a portion of their salary to the Swiss tax authorities. The reason? The tax deducted directly from the payslip is calculated according to a flat-rate scale that completely ignores your actual expenses (mortgage interest, childcare costs, pensions).

To restore equal treatment with Swiss residents, federal law allows cross-border workers to request "Quasi-Resident" status through a procedure called Subsequent Ordinary Assessment (SOA or TOU). However, this process follows strict calculation rules and contains certain pitfalls. Here is a detailed analysis to optimize your taxes without making a mistake.

1. Understanding the difference: Withholding vs. SOA

As a cross-border worker (especially in the cantons of Geneva, Zurich, or Aargau), you are subject to Withholding Tax (ISO). Your employer deducts the tax directly from your gross salary according to a scale (e.g., Scale A for single, B for married).

This scale incorporates average flat-rate deductions. For example, it assumes you have normal commuting expenses or standard medical costs. However, it completely ignores your personal investments (pensions) or heavy expenses (mortgage).

The Subsequent Ordinary Assessment (SOA/TOU), granted via quasi-resident status, allows you to escape this flat rate. You will fill out a complete Swiss tax return (just like a Geneva or Zurich resident). The administration will calculate your exact tax. If it is lower than the tax deducted at source, you will be refunded the difference.

2. The complex calculation of the 90% rule

The tax administration is uncompromising on this condition. To qualify as a quasi-resident, at least 90% of the gross worldwide income of your tax household must be subject to taxation in Switzerland.

What is included in the calculation?

• Swiss Income (The numerator): Your gross cross-border salary, any real estate income you own in Switzerland.
• Worldwide Income (The denominator): Your Swiss salary + your spouse's French salary + rental income in France (gross rents) + dividends and interest from your worldwide bank accounts + any pensions received.

Concrete examples:

• Single tenant: Swiss salary of 100,000 CHF. No other income. -> 100% of Swiss income. Status granted.
• Married couple, rental owners: Swiss salary of 120,000 CHF. Spouse's French salary: 10,000 CHF (equivalent). Rent collected in France: 15,000 CHF (equivalent). Total income: 145,000 CHF. Swiss share: (120,000 / 145,000) = 82.7%. Status denied.

3. The complete list of authorized deductions

If you are eligible (the 90% is reached), you access the tax Holy Grail: the deduction of your real expenses. Here are the items that generate the biggest refunds:

4. Beware of the "Trap": Why NOT to apply for SOA?

Applying for quasi-resident status is not a simple risk-free "attempt." This is where many cross-border workers make a costly mistake.

What happens if you request the SOA? The tax administration cancels your flat-rate withholding tax and recalculates everything from scratch.

• The danger: If the total of your "real expenses" (commuting, meals, insurance) ultimately turns out to be lower than the standard flat rate that was secretly included in your withholding scale, the tax administration will ask you to pay an additional tax supplement!
• The impossibility of turning back: Before 2021, you could withdraw your request if the calculation was against you. This is no longer the case. If the final bill is higher, you will have to pay it.

Our expert advice: Never file an SOA request without first running an accurate simulation, either via your canton's official software (e.g., GeTax in Geneva) or by consulting a cross-border fiduciary or tax specialist.

5. Application according to Swiss cantons

The relevance of this status depends entirely on the canton where your employer is located, due to Franco-Swiss bilateral agreements.

📍 Cantons with generalized withholding tax (Geneva, Zurich, Aargau, etc.)

This is the main playground for quasi-resident status. In the canton of Geneva, which did not sign the 1983 agreement, tax is systematically deducted in Switzerland. Requesting the SOA before March 31st is the normal procedure to claim a 3rd pillar or childcare costs.

📍 Cantons of the 1983 Agreement (Vaud, Basel, Neuchatel, Valais, Jura)

In these cantons, the default rule is that the cross-border worker (who returns daily to France) is exempted from withholding tax in Switzerland (they pay their taxes to the French tax authorities). By definition, you cannot request an SOA to recover a tax that was never deducted.

Exceptions in these cantons: Quasi-resident status remains possible and relevant only for:

• Public sector employees (University hospitals like CHUV, administrations) who are taxed at source.
• "Weekly" commuters (who rent a base in Switzerland and only return to France on weekends), who lose their cross-border tax status and are subject to withholding tax.

6. The ibani Hack: Secure your tax refund

You have made your calculations, submitted your SOA, and the Cantonal Tax Administration (AFC) notifies you of excellent news: they will refund you 3,500 CHF in overpaid taxes!