Subject to income tax at source and the employer isn't withholding it... what do I do?

If an employee subject to withholding tax has their employer obliged to withhold that tax, and the employer fails to meet this obligation, what happens to the employee?

We are Swiss taxpayers because we have our domicile there, own property there, or work there.

The taxpayer works for a diplomatic mission to international organisations as a cross-border worker, without enjoying diplomatic status and its privileges themselves, notably tax exemption in Switzerland. The Swiss mission informs the foreign mission and the taxpayer about the taxpayer's status and the obligations of each. The diplomatic mission, due to its status, must not withhold tax at source, but the taxpayer must declare their income to the cantonal tax authorities.

The taxpayer does not report to the cantonal tax office and disputes successive default assessments.

Following an initial tax period (2011) that went up to the Federal Supreme Court (ruling 2C_436/2016) to be sent back to the cantonal court, the cantonal court concludes that Switzerland is indeed not competent to tax based on the applicable Double Taxation Agreement.

The applicable CDI is amended in 2012. The taxpayer loses before the Federal Tribunal, requests a review of the federal judgment, review request considered inadmissible.

For the 2013 tax period, the taxpayer unsuccessfully brought the case before the cantonal court.

The tax authorities contact the taxpayer who persists in denying their tax liability in Switzerland. The tax authorities issue default assessments for the following 7 tax periods (2014-2020).

👉 Federal judges remind:
the rules of domestic law governing subjection (limited due to salaried employment),
▶️ that the applicable Double Taxation Convention provides for taxation at the place of employment unless in certain cases (not met in this instance),
▶️ that withholding tax is a method of tax collection.,
so that tax laws have a legal basis for a taxpayer subject to tax in Switzerland, but whose employer is not required to withhold tax at source, must file a tax return.

The ruling is in French. This is a Genevan case.

Federal Tribunal, judgment 9C_155/2025, of 22 May 2025