Daniel Vinnik

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Expert in international corporate, IT, and crypto law. Has extensive experience in business setup and support in the USA, EU, LATAM, and the Middle East. Specializes in corporate structuring, compliance, KYC/AML, IP, GDPR, as well as regulation of crypto and fintech projects.

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Case: Tax dispute in Switzerland: protecting income from a Ukrainian employer

International corporate law
Reading time: 4 min.

A Ukrainian citizen residing in the canton of Thurgau under S protection status approached us while continuing to work under an employment agreement with a Ukrainian employer.

Taxes on her income were partially paid in Ukraine, but the Swiss tax authority raised questions regarding the declaration and taxation of income in Switzerland for 2023-2025.

Client’s objective

The client received requirements to file Swiss tax returns and provide explanations regarding:

  • where she actually resided during each tax year;
  • from where she performed her work;
  • how much time she spent in Ukraine and Switzerland;
  • where taxes were paid;
  • whether obligations to pay Swiss social security contributions arose;
  • whether the double taxation agreement could apply.

In addition, the tax authority refused any further extension of the filing deadlines for the 2023 and 2024 tax returns.

Main risks

The situation was complicated by the fact that formally retaining a Ukrainian employment agreement does not in itself mean that the income is taxable exclusively in Ukraine.

For the Swiss authorities, the following factors are particularly important:

  • the actual place where the work was performed;
  • the number of days spent in Switzerland;
  • the availability of accommodation;
  • the centre of vital interests;
  • the nature of the relationship with the Ukrainian employer;
  • evidence of taxes paid in Ukraine;
  • the possibility of claiming a foreign tax credit;
  • whether there is an obligation to pay AHV/IV/EO/ALV.

A Ukrainian tax residence certificate was insufficient without a complete description of the factual circumstances.

There was a risk of:

  • additional Swiss tax assessments;
  • fines and interest for late filing;
  • double taxation of the same income;
  • separate claims relating to social security contributions;
  • an adverse assessment of an incomplete or contradictory document package.

What we did

Our team prepared a legal position regarding the client’s tax status and income.

The work was divided into several areas.

1. Analysis of the tax years

We analysed 2023, 2024 and 2025 separately because the factual circumstances, periods of stay, income amounts and filing status differed.

2. Analysis of Ukrainian tax returns

We took into account:

  • income amounts;
  • tax returns;
  • taxes actually paid in Ukraine;
  • payment dates;
  • the possibility of using these amounts to eliminate double taxation.

3. Position for the Swiss tax authority

We prepared a draft covering letter in German in which we:

  • described the client’s actual residence and working arrangements;
  • explained her relationship with the Ukrainian employer;
  • specified the taxes paid in Ukraine;
  • stated the need to apply double taxation relief mechanisms;
  • requested that the documents be taken into account and that the client be allowed to submit additional explanations;
  • separated the issue of tax residence from the issue of the source of income;
  • recorded the client’s willingness to cooperate with the tax authority.

The letter also specified the client’s planned holiday period, during which she would not be able to promptly receive and process correspondence.

4. Evidence pack

To support the position, we prepared a list of the required evidence:

  • Ukrainian employment agreement;
  • income certificates;
  • bank statements;
  • tax returns and payment documents;
  • tax residence certificates;
  • a calendar of stays in Switzerland and Ukraine;
  • travel evidence;
  • documents relating to accommodation;
  • correspondence with the tax authority;
  • materials relating to social insurance.

5. Risk matrix

A separate risk matrix was prepared covering:

  • income tax;
  • double taxation;
  • tax return filing deadlines;
  • fines and interest;
  • AHV and other social security contributions;
  • evidence of the actual place of work;
  • risks arising from incomplete communication with the tax authority.
LEGAL OPINION & ACTION PACK

Interim result

The tax authority of the canton of Thurgau did not approve any further extension of the deadlines for 2023 and 2024, but confirmed that additional explanations and documents could be submitted after the tax returns were filed.

The deadline for the 2025 tax return was extended until 30 September 2026.

The client received:

  • a structured legal position;
  • a draft letter to the tax authority;
  • a Ukrainian translation;
  • a list of evidence;
  • a calendar of further actions;
  • a matrix of tax and social security risks.

The dispute is ongoing, but instead of fragmented responses, the client now has a single documented position for communication with the Swiss authorities.

Value for the client

The work made it possible to:

  • reduce the risk of contradictory explanations;
  • separate the tax issues for each year;
  • confirm taxes paid in Ukraine;
  • prepare the basis for claiming a foreign tax credit;
  • take into account not only income tax but also social security contributions;
  • move communication with the tax authority into a controlled legal process.

Do you work for a Ukrainian employer while living in Switzerland and have you received a request from the tax authority? The lawyers at Prikhodko & Partners will help analyse your tax residence, the application of the double taxation agreement and prepare a documented position for the Swiss tax authority.

Calculate the cost of services
1 question

Do you need to determine your tax residence?

Yes
No
2 question

Do you need to avoid double taxation of the same income?

Yes
No
3 question

Do you need to confirm the actual place where you perform your work?

Yes
No
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