Special tax on provisionally-admitted migrants to end in 2018

The move is designed to make it less cumbersome and expensive for employers to hire provisionally-admitted migrants Keystone

As of January 1, 2018, holders of an ‘F’ permit will no longer be subjected to a 10% special ‘compensatory’ tax on income designed to recuperate costs of their asylum procedures. 

However, the waiver of the 10% compensatory tax is valid only if the income earned is less than CHF15,000 ($15,173) within 10 years of entry into Switzerland. The waiver also does not apply if the person obtains refugee status or a residence permit. 

Holders of the ‘F’ permit are provisionally-admitted migrants whose request for asylum has been rejected but they cannot be sent back to their countries as it would violate international law, endanger their safety or is technically impossible due to a lack of enforcement capacity. 

The measure to get rid of the 10% “compensatory” tax on the income of such migrants comes following a revision of the law on foreigners in December last year. Besides making it tougher to acquire a permanent residence permit (“C” permit) or enter the country via the family reunification route, the new law is meant to encourage the integration of refugees, people with temporary right to remain and asylum seekers.

The special tax waiver is expected to cost CHF3.6 million to the public purse. It is estimated that around 200 additional migrants would be integrated into the labour force thanks to the measure, as it means employers do not have to deal with paperwork relating to the tax. 

However, Switzerland has not abandoned the practice of seizing assets of asylum seekers above a ceiling of CHF1,000 to help offset some of their costs.