The view of the Tax Authorities of the Canton Zurich was based on the jurisprudence of the Federal Supreme Court developed under art. 3, para. 3, sub-para. e of the Federal Council’s resolution regarding federal direct taxation of December 9, 1940 (aBdBSt). The Federal Supreme Court has ruled that «a gainful activity in Switzerland» set forth in art. 5, para. 1, sub-para. a FDTA shall not be interpreted in the sense it had been used to interpret art. 3, para. 3, sub-para. e aBdBSt.
The Federal Supreme Court is of the view that
the salary of an employee who is not tax domiciled or resident in Switzerland, but is employed by a Swiss resident employer can only be subjected to tax at source if he is physically present in Switzerland. If the employee works for the Swiss resident employer exclusively from abroad, the salary is not subjected to tax at source.
German and French versions of the publication entitled "Chancen und Risiken rechtlicher Neuerungen 2011/12" may be ordered from Schulthess Verlag.