Hello, could you please help me with the question whether the Severance pay will be taxed in Switzerland in case someone is a resident in another country at the time of the severance payment? The employment contract related to this severance pay was in Switzerland.
Unless you are/were a tax resident of Switzerland at the time of receiving the severance payment, then no, the income is not taxable in Switzerland, but in your country of tax residence.
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I think you need to check the DTA between your country and Switzerland.
Skimming https://www.taxadvice.ch/wp-content/uploads/thèse-CL.pdf it seems like it’s not a trivial topic and depends on DTA and how the severance is classified.
Also this https://pestalozzilaw.com/media/publications/documents/bTermination_Agreements_Employment_Switzerland.pdf :
The portion that is remuneration for the period before the termination of the employment contract is subject to wage tax at source.
For the portion that is remuneration for the post-termination period, for example, early retirement or the loss of future income, Swiss taxation may be restricted under the applicable double tax treaty with the employee’s country of residence
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