Swiss tax return - FAQ
Gepostet von Beat Munsch am Samstag, Februar 19, 2022 Unter: Steuern
If you need to complete a swiss tax return, these are the most common FAQ I have encountered during my many years of practice as a tax accountant.
- Which parts of my income do I need to declare for Swiss tax purposes?
The total worldwide income of an individual or if married of both spouses for the actual tax period needs to be declared in Switzerland.
It is possible, that parts of the income only are used to determine the Swiss tax rate.
Sources of income are:
- Income from Job / self employed income
- Real estate income
- Wealth taxes: What do I need to declare?
In Switzerland, you need to declare your total worldwide wealth. Parts of the wealth, especially real estate can be taxed outside of Switzerland. In that case, this part of the wealth will only determine the Swiss wealth tax rate, but not be taxed in Switzerland.
The wealth includes:
- Bank accounts (balance as of December 31st, or as of the date of deregistration in Switzerland)
- Shares, mutual funds, fd, bonds: Exact name and ISIN Number, amount of the holding, date of purchase / sale per position
- Crypto currencies
- Cash holdings
- Precious metals, jewelry, art
- Possession of vehicles (depends on the canton)
- Real estate posession
- I have a house / property abroad. Do I need to declare it even if it is already taxed in the other country?
Yes, it needs to be declared in Switzerland. To declare it correct, we need to have the following information:
- Kind of property like house, apartment, plot, land
- Construction year
- Current value
- Number of rooms
- Date of its purchase / acquisition
- If it is rented out: Monthly rental income as mentioned in the rental contract and number of months it really was rented out
If the property is a building or part of a building, in a swiss tax perspective it always generates income. Either it is actual rental income or if the property is for private use, it is a rental value, which in Switzerland is called "Eigenmietwert".
If the property is located in Switzerland, the rental value or rental income is fully taxed as income.
If the property is located outside of Switzerland and the other country has a double taxation treaty with Switzerland which is covering real estate income, the income from the property usually only helps to define the Swiss income and wealth tax rates
- I have a credit / loan. How does this affect my taxes?
A loan helps you to reduce your taxes in Switzerland. The balance as of December 31st will be offstet against the taxable wealth.
Paid interest can reduce the taxable income. Important: All numbers, especially the total paid interest needs to be backed up with official bank documents.
- I have supported my parents financially. Is there a potential deduction?
The support to your parents could be deduced if all of the following criteria are met cumulatively:
- Proof of the relation between you and your parents (this could be a
copy of your passport, where your parent’s name is mentioned
- Proof of the payment to the supported individual. This needs to be
a copy of the bank transfer from your bank account to your father’s or
mother’s bank account (Key condition!)
The whole claimed support amount needs to be backed up with these bank documents (currency does not matter)
- The supported person needs to be mentioned with its full name,
address and date of birth
- Per supported person is a deduction possible, if the payment
towards this supported person is on an annual basis at least meeting the possible tax deduction. E.g.: CHF 6500 (federal taxes).
- The supported person must be relying on the support due to its
inability to generate sufficient income and has insufficient assets. In
case the tax administration asks back, you must be able to proof the need
for support with tax data of the supported person or other suitable
- Proof of the relation between you and your parents (this could be a copy of your passport, where your parent’s name is mentioned
- In order to get my work related deductions correct, which information is helpful?
- Address of the workplace
- In case you have commuted by public transport: cost of the monthly/annual train ticket
- Are there other possible deductions?
Yes, there are:
- Pillar 3: Tax confirmation of the bank / Insurance required
- Extra contributions to pension insurance Pillar 2: Tax confirmation of pension insurance required
- Self paid profession related education, in case there is already primary education accomplished, cost for profession related education can be deduced: Detailed invoice required
- Childcare cost, in case both partners are working. Tax receipt of the childcare facility required
- Self paid health cost: tax certification of health insurance and eventually dentist bills are required. In most cantons, Health cost are only deductible if they exceed 5 % of the taxable net income.
- If you qualify as an expatriate, you could deduce the cost for double housing. For this you need to provide: Deputation letter which qualifies you as an expat, proof that you maintain your primary residence abroad at your disposition, rental contract of your swiss apartment. For Expatriates also the school fees for private schoooling for their children held in a foreign language can be deductible. In this case we need to have the invoices from the school.
- I have submitted my tax return and did not hear back until now. Is this normal?
No reason to worry.
The tax administration does not confirm the receipt of the tax return.
It can take them several months to assess the tax return and come back with the final taxation.
In case they did not receive the tax return, they would send out reminders asking for the tax return.
If you dont react to these reminders, They would complete the tax return on your behalf based on their "best possible" assumptions.
Along with this they also would charge a hefty fee for completing the tax return themselves.
If this has happens, you still have 30 days to react and could file a proper tax return, if the real numbers would be in your favour.
Tags: taxes tax return faq