Podcast
Sehen Sie sich das Video auf YouTube an
Behandelte Themen
- Das Schweizer Steuersystem
- Steuerarten
- Wie reduziert man die Steuerlast?
- Das Schweizer Steuerjahr
- Steuertipps für Expats
- Internationale Besteuerung
Haftungsausschluss: Dieser Podcast stellt keine Finanzberatung dar und ersetzt keine persönliche Beratung. Wir empfehlen Ihnen dringend, bei spezifischen Fragen oder Anliegen zu finanziellen Angelegenheiten im Zusammenhang mit dem Leben in der Schweiz professionelle Hilfe in Anspruch zu nehmen. Die Verantwortung für alle Handlungen, die auf der Grundlage der Informationen in diesem Podcast vorgenommen werden, liegt ausschließlich beim Leser.
Unser Gesprächspartner
Martin Beiner ist Steuerberater mit Sitz in Zürich. Er ist seit Beginn seiner Karriere im Steuerwesen tätig, zunächst bei den Steuerbehörden und anschließend bei einer der "Big Four", wo er Expats bei der Regelung ihrer Steuerangelegenheiten in der Schweiz unterstützte. Heute ist er selbstständig und betreut englisch- und deutschsprachige Kunden.
Über diese Folge
Hier sind einige von Martins Tipps, um Ihre Steuerlast zu reduzieren:
- Wahl des Kantons: Wenn Sie noch keinen Wohnort im Auge haben, informieren Sie sich über die Steuersätze der einzelnen Regionen. In einem steuergünstigen Kanton können Sie möglicherweise viel Geld sparen.
- Abzüge für Immobilien: Wenn Sie eine Immobilie besitzen, vergessen Sie nicht, die Hypothekarzinsen und allfällige Unterhaltskosten abzuziehen.
- Betriebskosten: Kosten wie das Pendeln können oft abgezogen werden. Es gibt auch einen Pauschalabzug für Kleinunternehmer (derzeit 3 % des Gehalts, maximal 4.000 CHF).
- Altersvorsorge: Beiträge zur zweiten und teilweise zur dritten Säule der Altersvorsorge können von der Steuer abgezogen werden.
- Kinderbetreuungskosten: Kinderbetreuungskosten können oft abgezogen werden. Der genaue Betrag hängt von Ihrem Kanton ab.
- Spenden: Spenden an anerkannte gemeinnützige Organisationen können abgezogen werden. Bewahren Sie alle Belege über Ihre Spenden während des Jahres auf.
Ressourcen
Wie man aus der Kirche austritt – mit Musterbrief (auf Deutsch)
Informationen der Regierung zu Immobiliensteuern
Informationen der Regierung zu den Säulen der Altersvorsorge
Unsere Podcast-Folge zur Finanzplanung in der Schweiz
Unsere Podcast-Folge zur Finanzoptimierung in der Schweiz
Nächste Schritte
Wenn Ihnen das Video gefallen hat, würden wir uns über ein „Gefällt mir”, einen Kommentar und ein Abonnement unseres Kanals freuen. Vielen Dank für Ihre Aufmerksamkeit.
Informieren Sie sich über aktuelle Stellenangebote in der Schweiz.
Senden Sie uns eine Initiativbewerbung.
Melden Sie sich für unseren Newsletter an und erhalten Sie unser E-Book „Leben in der Schweiz” als Willkommensgeschenk.
Transkript
Kathrin: Martin, welcome to the show.
Martin: Hi, Kathrin. Thanks for having me.
Kathrin: Yeah, of course. So maybe we can just start with you telling us a little bit about yourself and where do you live, and your background?
Martin: Yes. My name is Martin, as you already mentioned. I'm living in Zurich and I'm a tax consultant, so I have my own business helping clients, mainly expats, but also Swiss people with their individual taxes.
Kathrin: Okay, amazing. And what got you started in that?
Martin: That goes way, way back. I did an apprenticeship once on the communal side. And then I moved to the tax authorities as a local tax authority here in Zurich. And after that I stuck with the taxes and then I was working for a big four company in the global mobility field, also helping people with taxes in Switzerland, also social security and a little bit of immigration as well. And yeah, since five years I have my own business and never get rid of taxes.
Kathrin: Of course. Yeah. Everybody needs tax help.
Martin: Yeah exactly. Exactly.
Kathrin: But as I understand it, you're specialised in dealing with expats and expat taxes mostly. Is that right?
Martin: Yes. So, I would say that most of my clients are foreigners in Switzerland, and it usually has a connection to their home country or wherever they're coming from.
And I think I have a good understanding of what they need and what they are asking for and what their problems are. I, myself used to be an expat as well once, so I was living in Singapore.
Kathrin: Okay.
Martin: And Malaysia. So, I understand a little bit also the struggle of moving to a country you don't really know.
Kathrin: Absolutely. It takes a while, doesn't it, to get settled and understand the system and everything, so...
Martin: Exactly. And the rules are different. So I see myself also as a bit of a translator, or as someone who is handholding the person and guide them through the tax jungle.
Kathrin: Yeah. And that's gonna be so helpful, of course. So let's start a little bit with the tax basics.
There are different levels of taxation in Switzerland, right? So like, federal, cantonal and all that. So, can you just explain how that system works 'cause I know it's not the same in most other countries?
Martin: Yes, correct. So Switzerland has basically 26 or 27 different tax laws. One on a federal level. So that's... wherever you are living, that's what you're paying in every Canton. But then it has 26 different Cantonal tax laws. And the tax rates and some rules might be different from one Canton to another. And you also pay communal taxes. So um, also on a communal level, so you have these three different taxes you pay. And it always depends where you're living. At the end of the calendar year. And that's why you pay for the full year.
Kathrin: So if you move from one place to another, it will still just be wherever you ended up at the end?
Martin: Yes, that's correct.
Kathrin: Oh, interesting, okay. So yeah, I guess everybody pays federal taxes like, the same.
Martin: Yeah, that's correct.
Kathrin: And then cantonal, I know some people move to a specific canton because some cantons have significantly lower taxes than others, right?
Martin: Yeah. So Zug, for example, is very famous as a low-tax canton.
Kathrin: That's right.
Martin: So let's say if y you move today to Zug, then you will pay for the full year in Zug. And then it also depends on a communal level, every commune has its own multiplier. And that has thenalso a bit of an impact as well.
Kathrin: Yeah. So even if you're living in the same canton as, say your neighbour, you might pay different tax rates.
Martin: Yes.
Kathrin: Slightly, I guess.
Martin: That might be possible, yeah.
Kathrin: Yeah. Which is interesting. It is completely different in other countries, isn't it? Like in the UK, I think you just pay the same pretty much in all of England.
Martin: Yeah.
Kathrin: So that's very different for someone to come and understand that system. It can be a bit...
Martin: It can be a bit tricky. It comes from the political system as well.
Kathrin: Of course. Yeah.
Martin: Where the commune and also the canton has quite a bit of power and they're also defining how much taxes they want to charge.
Kathrin: Yeah. Which is also then interesting because you can then actually have a bigger influence on your taxes if you are then strategic about it.
Especially someone coming in who doesn't yet have a tie to Switzerland, who doesn't need to live in a specific area.
Martin: Yeah, absolutely. That definitely has an impact as well on where you end up living, I guess, when you're new to Switzerland.
Kathrin: Yeah.
And then there's one more thing. There's church tax, right?
Martin: Correct. So you have the communal, the cantonal and the federal tax. And you're also paying church tax in case you belong to one of the official churches in Switzerland: is the Christ Catholic Church, the Roman Catholic Church, and as well the Protestant church.
So these three churches, the tax authorities would collect the taxes for them as well. If you belong to another church or to no church at all, then you wouldn't pay any taxes for the church.
Kathrin: And I think you have to declare that when you first move to Switzerland, right?
Martin: Correct. When you arrive in Switzerland, you will be asked in what kind of church you belong to. Which might be a bit weird question when they ask that.
Kathrin: But it has an influence on your taxes.
Martin: There is a background of the taxes, exactly.
Kathrin: Okay. So that's quite good to know then what you're signing up for.
Martin: Yeah. That's important to know when you arrive in Switzerland.
Kathrin: Excellent. So now we know the levels of taxation, we have to talk about the different types of taxes that you might pay. So obviously the most important or the most immediately important one might be income tax. So if you have an income in Switzerland, then you obviously are taxed on that.
Martin: Yes, correct.
So it's the income tax. Also interesting is there's also a wealth tax. I don't know if we come to that as well. That most countries don't have. So yeah, you pay income tax and wealth tax.
Kathrin: Yes.
Martin: And on the income tax, what you usually declare is your salary. If you're self-employed, your profit.
Kathrin: That's right.
Martin: Then you also pay taxes on dividends and interest. And also on rental income, you will pay taxes as well. So that basically all goes in one basket. And then you end up with a taxable income. And that's the base then on which the taxes are calculated.
Kathrin: Okay. So all of the income that you might have from different sources, mainly I would think for most people employment, but they might have other sources of income and then that's all put together.
Martin: Yes.
Kathrin: For your income tax. And tell us how it works if someone owns their own home, so they're not renting, but they own their home. There's still some income tax to pay, isn't there?
Martin: Yes, I knew you would ask that!
Kathrin: Everybody wants to know about that.
Martin: It's a so called deemed rental income, which is a bit of a strange concept. It's not known in any other country. So if you own your own property and you live there as well, there is this fictitious income, which will be added to your salary, or to your taxable income.
Kathrin: Based on how much you would get if you rented out your home, or?
Martin: Theoretically, yeah. It's a formula. The deemed rental income should be between 60 and 70% of a market rent. And that's calculated through a formula. Whether this is correct or not is then a different question.
Kathrin: Yeah, okay.
Martin: If you own a property in Switzerland the tax authorities will tell you what this deemed rental income would be. So in Zurich, for example, there will be a new valuation next year. So first time applicable for the tax year 2026. So they come and say this is your deemed rental income. And attached to that is also a taxable value for wealth tax purposes. Yeah. And that's gonna be added. If the property is abroad, then you would just use a formula based on the market value of the property. I got a lot of questions about what is the market value of the property. That's you... you estimate that basically.
Kathrin: Yeah. It can be a bit difficult to estimate, I'm sure.
Martin: Yeah. As long as you don't sell the property, you never know what the market value is.
Kathrin: Yeah.
Once you have all your income that needs to be taxed, I’m sure there are some ways that you can then reduce the amount of tax you have to pay. So, give us a few tips about how to reduce your income taxes.
Martin: So if we stay with the properties, maybe, so you have the deemed rental income on the income side, but then you also have a deduction for maintenance. For example, maintenance in the sense of Swiss tax law is all investments you do in order to keep the value of the property. If it increases the value of the property, it would not be deductible from your taxable income. So usually you look for words like replacement or renovation.
Kathrin: I see.
Martin: Or these kind of things. If there hasn't been a pool before and suddenly there is a new pool, then that will not be deductible.
Kathrin: Yeah, no, that makes sense.
Martin: Then also the interest, so if you have a mortgage, the mortgage interest will be deductible from your taxable income. And the mortgage balance as such will be deductible from your taxable wealth.
Kathrin: Oh, I see, yes. That makes sense. So, for a lot of people in Switzerland, they imagine that it's not worth paying off the entire mortgage 'cause you can deduct so many things, right?
Martin: Yes. So that's interesting. So in Switzerland, usually people don't pay back mortgages. So, they keep the mortgage... in their head, they say it's tax beneficial, so we don't pay back the mortgage. If you do the calculation, I think it depends a little bit on the interest rate, and so you would have to do the calculation.
As long as the interest rates are so low, it might be beneficial. But then if they go up. You always have to do the full calculation. So on one hand, you save taxes by paying the mortgage and the mortgage interest, but then you still pay it to the bank. So you still pay something.
Kathrin: So it just depends on the individual situation.
Martin: Absolutely. Yeah. Yeah. For foreigners it's always interesting that in Switzerland you don't get a mortgage like in other countries like the UK or France.
Kathrin: And then you immediately try to start paying it off as quickly as possible.
Martin: Exactly. That's not a concept very known in Switzerland.
Kathrin: Yeah, it's interesting, isn't it? The difference. But what about, so let's say, someone comes and they start out by renting. They don't own a property yet. How can they reduce their taxable income?
Martin: Yeah, so the rent is not affected, only in the canton of Zug you have a deduction for rental.
Kathrin: Oh, nice. Okay.
Martin: So here we see the different canton... and the cantonal laws.
Kathrin: So maybe the conclusion is here just to move to Zug.
Martin: But the rent is quite high there as well. No, it depends a little bit. And then it's not all about taxes, so...
Kathrin: No, of course.
There's other parts of life where you might decide to go somewhere for another reason.
Martin: Exactly.
Kathrin: Of course.
Martin: Yeah, so in general the rent is not tax deductible. But if you're working, there are some business deductions like commuting costs from home to work which would be deductible. Then also the costs for having lunch outside, there is a standard deduction. And then there is also a standard deduction of 3% of your salary up to 4,000 Swiss francs for all kind of little expenses you might have in connection with the job. So that's quite good. You don't necessarily need to keep all the receipts. So it's all done through a lump sum.
Kathrin: Okay, nice. That's good. And what about things like if you decide to do some further education to increase your skills?
Martin: That would also be deductible as long as it's connected to the job and not subsidised by your employer in any way.
Kathrin: Of course. Yeah. If they're already paying for it, you can't then also deduct it.
Martin: Because these are unusually benefits which are tax-free and not part of your salary. And therefore, you cannot deduct it again.
Kathrin: You can't deduct them twice. Yeah. And anything else that can be deducted?
Martin: There are a few other things. What we also like to talk about is the Swiss social security system. Because these contributions are in general tax-free. There are three different pillars. I don't know if you have heard about that?
Kathrin: That's right, yes.
Martin: The first pillar is the AHV. So the old age state pension where you pay a certain amount to the social security system. There you cannot do much. So that's 5.3% what you'd then deduct, or got deducted from your salary automatically. Also the unemployment insurance would be something which got paid through your salary automatically. So that's the first pillar.
When it comes to taxes, when it gets a bit more interesting is then the second pillar. Because every employer has to provide a pension fund to their employees.
Kathrin: Like the workplace pension.
Martin: Yes, correct. And there you usually have a gap in that pension. That's nothing dramatic. The gap automatically is created by, for example, if you have a salary increase, there is a gap created because they always calculate the amount you should have in your pension fund based on today's salary. And what you should have when you reach retirement age.
Kathrin: Of course. Yeah.
Martin: Now, if you are new in Switzerland, obviously you never contributed to the Swiss pension fund.
Kathrin: Then you have a very big gap.
Martin: Of course. And you can close that gap by making voluntary contributions to the pension fund. These voluntary contributions will be fully deductible from your taxable income.
Kathrin: Okay. Amazing.
Martin: A few caveats there. But before you do that maybe check also what your future plans are because there's a blockage of the entire pension fund for three years or so, you would not be able to touch that money if you made voluntary contributions.
Kathrin: Oh, I see. Okay.
Martin: Yeah. And then we have the third pillar. And the third pillar is a complete private savings scheme where if you're employed, you will be able to contribute CHF 7,253 I think for this year (2025).
Kathrin: It changes every year, doesn't it?
Martin: It changes every year or every second year. And that's the maximum contribution you can make, and that would also be fully deductible from your taxable income.
Kathrin: And then again, it depends whether it's worth it, depending on, how long you wanna stay in Switzerland and what your plans are, what else you need the money for.
Martin: Yes, exactly. So again, the third pillar is also blocked and there are only four reasons why you can take it out. One is you just mentioned it, if you leave Switzerland permanently. Again, you will be able to withdraw that money. If you wanna buy a property you could use it as a down payment. If you become self-employed and you no longer belong to a pension scheme, then that would also be a reason why you can withdraw that money using as a capital, for example.
Kathrin: Yeah. For your business?
Martin: Yes.
And the fourth reason is then when you reach retirement age, and that's currently 65 in Switzerland.
Kathrin: Okay, excellent. And what about, so if someone comes to Switzerland with children, and then both parents may be working and they need childcare. Can you make any deductions for that kind of thing?
Martin: Yes. So childcare would be deductible up to CHF 25,000 per child per year. Childcare is quite expensive in Switzerland.
Kathrin: Yeah!
Martin: But the condition is that both spouses would be working.
Kathrin: Yes. That makes sense.
Martin: Or in other way, not be able to take care of the children, for example, because of disability or illness or something like that.
Kathrin: That makes sense, yeah.
And then maybe a last one to talk about is that, I know that at least for me in the UK, I can deduct charitable donations. So that's possible as well in Switzerland, but is it for all charitable donations or are there some rules?
Martin: Of course there are some rules! Everything's only possible with the relevant rule. Yes, so charitable donations can be deducted as well. However, the institution or charity needs to be recognised by the Swiss tax authorities. There's a huge booklet with thousands of organisations, usually they're in Switzerland. And then you need to be able to prove that you obviously donated and if it's a Swiss charity.
Kathrin: You get a receipt or something, right?
Martin: Yes. You get a confirmation automatically by the end of the year. That would then be also deductible from your taxable income.
Kathrin: Okay. That sounds good. So there are quite a few options there.
Martin: There are quite a few options. I'm just thinking if there are some others. There are lots of lump sums in Switzerland as well, so for example health insurance premiums, that would also be deductible. However, there is a maximum deduction, what you can deduct.
Also health costs in general, if you pay something yourself, for example dental is usually not covered by the health insurance. That's theoretically deductible as well, however, there is usually also a threshold. And only the part over that threshold would be deductible.
Kathrin: Okay. So like basic dental treatment, not so much, but if it's something that cost quite a lot.
Martin: Yes, and depends also on your income, obviously. So the percentage is depending on your income and then obviously the threshold automatically increases if your salary increases as well.
Kathrin: Oh, I see, yeah. And I guess those kinds of things, that's why you need an expert like yourself to help because it can then get a little bit complicated, depending on the situation.
Martin: It can be a bit complicated, yeah. Or you just need to know it.
However, I would say that if you look at the options, what the tax authorities give you in terms of preparing the tax return, these kind of tools are getting better and better as well. And guide you through it. So my tip, if you want to do it yourself, do it in an application where you have a browser, so you can basically translate. Use the browser translation to do it. Sometimes the translation is a bit weird.
Kathrin: Yes.
Martin: And it might more confuse you than help you. But in general, it's quite helpful.
Kathrin: Okay. Excellent.
Alright, we'll be back after a really short break.
(AD BREAK)
Kathrin: We already spoke a little bit about the wealth tax, but maybe we'll just come back to it briefly. So it's not a huge percentage of the wealth, isn't it? It's quite small and it doesn't start right away from zero as well. Is that right?
Martin: Yes. So, important to say is that wealth tax you only pay on a communal and on a cantonal level. So on a federal level, there's no wealth tax.
So it depends really on the canton you're living in. Some cantons have some tax-free amount. Some cantons, they only start on a on a higher level. So for example in Zurich, I think if you are single, the wealth tax starts at CHF 80,000. And as a married couple it starts at CHF 160,000 roughly. However, you need to declare your wealth and no matter whether you have nothing or a lot, what you basically declare is your bank accounts.
Wealth tax is always a snapshot per December 31st. So we basically declare the wealth per December 31st. So for Swiss bank accounts, it's no problem because Swiss banks will provide you with a statement showing the balance per December 31st. For foreign banks you usually don't get such a statement because most likely in the country you're coming from there is no wealth tax.
Kathrin: Yeah. You don't need it.
Martin: You don't need it, so you need to collect this information. Usually a snapshot from e-banking would be sufficient. So you don't need an official statement from the bank because they usually like to charge for such extra work.
Kathrin: But you just have to remember or know on December 31st to do it.
Martin: Yeah. Or most likely you can also go back to see it. Where it comes for the snapshot, what's helpful is Bitcoins, for example, or cryptocurrencies. There you don't necessarily have a balance per December 31st, so that would make sense to log in on that day to get the snapshot of how many bitcoins.
Kathrin: How many you have, and what the price is on that day and all that.
Martin: Yeah, exactly.
Kathrin: Okay.
Martin: When it comes to cryptocurrency, there's also an official value.
Kathrin: You could check that, yeah. And depending on how many you then have or, yeah.
Martin: Yeah, correct. There is also an official exchange rate provided by the tax authorities when it comes to foreign currencies.
Okay. True. What's not part of the tax is your pension fund. So the pension fund is tax-free and also the fund you have in the third pillar would also be something which is not a taxable item.
Kathrin: Okay.
Martin: And also the interest and dividends out of these pensions, they're also tax-free.
Kathrin: They also won't be taxed. Okay. And then we have some other types of taxes, like capital gains tax.
Martin: We actually don't.
Kathrin: Oh, okay.
Martin: So that's the good part. We have a wealth tax, but then there is no capital gains tax.
Kathrin: Oh, I see. Okay. So wealth tax is almost like, it's a replacement for that.
Martin: Yes. Correct.
Kathrin: Or instead of. Okay, good.
Martin: Yeah, so if you buy shares on the market and you sell it to a higher price, that's usually a tax-free amount. The losses on the other hand cannot be deducted. There's one exemption if you're a professional trader. So if that's your profession to trade on a daily basis, then that would be seen as self-employed income. And then it's automatically also taxable income.
Kathrin: Okay.
Martin: There is no concrete points or checklist where you go through and check this, here you are, a professional trader or not. So it's all given by the tax practice and some court decision who is a professional trader or not.
Kathrin: I suppose for most of the listeners, they might be employed or have some kind of other income, so it wouldn't be their main income.
Martin: Yes. Depends always a bit on the circumstances; how often you do it, with what money, if you have a loan in order to trade.
Kathrin: Of course. Then that becomes a bit more complicated.
Martin: Yeah. In Swiss tax law, there's no black or white, it always depends on your personal circumstances as well.
Kathrin: Okay. But then what about property tax?
Martin: So the properties or the value of the property is also taxable, a part of your wealth. However, if the property is not located in Switzerland, then it would not be taxed in Switzerland.
Kathrin: Oh. Then it's taxed in the country where it's located?
Martin: Correct. But you still have to declare it in your Swiss tax return. It will be considered in order to determine the applicable tax rate.
Kathrin: I see.
Martin: What does that mean? It means that the tax rate is calculated on your worldwide wealth and on your worldwide income.
Kathrin: Oh, okay.
Martin: But then the part which is related to the property abroad is gonna be excluded from taxation.
Kathrin: So you might have a different tax rate, but you won't pay more on that section of the property that's not in Switzerland.
Martin: Yes, correct. So let's say the value of the property is 50 and your, the amount you have on your bank account is a hundred. Your tax rate will be calculated on the total, so 150, but then only applied on the hundred.
Kathrin: Yes. That is in Switzerland, located in Switzerland.
Martin: Correct. And the tax rates are progressive.
Kathrin: Yes. That's why it matters. Yeah, of course.
And then maybe a final thing is inheritance tax or gift tax. What's the situation in Switzerland related to that?
Martin: Inheritance tax, the tax law applicable is always where the person who is giving you a gift or giving you an inheritance, so if the person is residing in Zurich, for example, and gives you something, then the Zurich tax law will be applicable.
Kathrin: Oh, okay.
Martin: I think that's the first important thing you need to know. So if you inherit something, let's say you living in Switzerland but your parents living in Sweden. Then the Swedish tax law, basically.
Kathrin: Okay, so basically it's about the giver and not the receiver.
Martin: Yes, correct.
Kathrin: But in Switzerland, as I understand it, there's not usually a tax if it's a direct line descendant like a child or a grandchild.
Martin: That's correct, yes. So if it's.
Kathrin: But if it's not, or if it goes the other way or it's somehow someone who's not related to you, then you'd be taxed?
Martin: Yes. Two things are considered. One is the amount of the inheritance or the gift. And the other one is the relationship you have to that person. So if it's your parents who give you something, then that's usually tax-free. If you would give me something, then that would not be tax-free.
Kathrin: No, of course not.
Martin: Because we're not related.
Kathrin: Yes. Okay.
So let's talk about the tax year at like, the time of year. So basically in Switzerland it corresponds with the calendar year, doesn't it, as we just discussed, 31st of December, that snapshot, isn't it?
Martin: Yes.
Kathrin: So the tax year goes from end of year to end of next year?
Martin: Yes. That's correct. Starting on 1st of January until December 31st. That usually gives a bit of a problem when it comes to people coming from the UK, or from Australia, or I think Hong Kong has a different tax year as well. Then you need to transform it to the calendar year, yeah.
Kathrin: Okay, so let's say the tax year ends on December 31st, and then what happens?
Martin: What happens is that you usually would receive a tax return in the following year. So now we are in 2025, preparing the tax return for 2024.
So basically, you declare what income you had in the period between January and December. And also the wealth per December 31st.
Kathrin: Yeah. And so do you receive a form at the beginning of the year from the tax authorities?
Martin: Yes. There are some exemptions. So for example, in Switzerland, Swiss people, or people with a C permit they don't have a withholding tax.
Kathrin: Okay.
Martin: If you are a foreigner with a B permit or a different permit, then there is a withholding tax. So that means your employer is responsible to withhold the taxes directly from your salary.
Kathrin: So they would've already been deducted, and then you've can decide if you want to file a return or just leave it, right?
Martin: Yes. Unless your annual gross salary is more than CHF 120,000. So basically more than CHF 10,000 per month. Then there is an obligation to file a tax return in any case.
Kathrin: Okay, so then you have to file it?
Martin: Yes. And if it's below, then it's voluntary, more or less because it's only voluntary in the first year.
Kathrin: Oh, I see.
Martin: In the following years it becomes mandatory.
Kathrin: So if you opt to file, then you must file every year. You can't say, oh, I wanna file this year and then not next year, and et cetera?
Martin: Yeah.
Kathrin: Okay. So you decide either to file or to leave it?
Martin: Yeah. And I think what's also important is that if you're married, you always file together. So if you're not married, you file as a single person. If you're married, you file together. Here again, the status per December 31st is important.
Kathrin: If you marry in July, you'll be filing jointly by December.
Martin: Yes. So you're filing for the full year together. And so for people with withholding tax, if you have withholding tax and you get married to a Swiss person, for example, then that means from the following month on you will no longer have withholding tax.
Kathrin: Oh, I see. Okay.
Is it always a good idea to file a return if it's not mandatory for you? Or does it also depend on the situation?
Martin: Exactly. Depends on the situation. And this one is a tricky one because if you file in this year and you have to file also in the following years.
Sometimes you don't know what you're doing next year, right?
Kathrin: Yes.
Martin: Maybe you have suddenly a salary increase and then it might not be beneficial.
Kathrin: And you end up paying more than you would've paid if you’d just left it alone.
Martin: Exactly. So what I usually do, I prepare the tax return for my clients. Then we see what the benefit will be. If the benefit is very minimal then we rather not filing a voluntary tax return. It depends also on the situation, if you receive the C permit anyway next year.
Kathrin: Oh yeah, then you might as well do it because next year it won't be applicable. You'll have to do it anyway.
Martin: Yeah. But if you just arrived in Switzerland, and usually you have a B permit and therefore having withholding tax for the next five years.
Kathrin: Yeah. At least.
Martin: And i think is always difficult to... I cannot read the future. Who can?
Kathrin: Yeah. You don't know in five years whether it's more beneficial one way or the other.
Martin: Yeah.
Kathrin: Okay. So once the tax year has ended, how long do you have to file your tax return if you do need to file one or if you want to file one? And what happens if you don't file at the right time?
Martin: So the first filing deadline is usually end of March.
Kathrin: Okay, so quite soon.
Martin: Quite soon, however that can be extended, also depending on the canton, to July, August. Some cantons have filing, you can extend until November or even December.
Kathrin: Oh, nice. And there's no penalty or issue if you extend?
Martin: There is no penalty. One thing: you have to remember to extend before the initial filing deadline.
Kathrin: Oh, yeah. Otherwise there's a penalty.
Martin: No, there's no penalty, but you don't get the extension anymore.
Kathrin: Oh, okay.
Martin: So that means if you missed the March deadline to ask for an extension, the tax authorities will not give you any extension anymore.
Kathrin: Okay. So then you have to file as quickly as possible.
Martin: Correct.
Kathrin: Oh, okay. And then you’ve complied, you filed. And then.. ideally that would be good! And then the assessment comes back, right? And then you receive a bill and you have to either pay more or you get money back, or how does it work?
Martin: Yes. So every tax returns gets reviewed. Not like, I know other countries have just like...
Kathrin: 0.5% or less get chosen each year.
Martin: Yeah.
Kathrin: And everybody else, they just let pass.
Martin: Yeah. In Switzerland, every tax return gets a review. And then the tax authorities are either asking for additional information in order to do the assessment. If not then you get an assessment, or if they're happy. Once they're happy, they send you an assessment. And based on that assessment, you receive then the final bill.
Kathrin: Okay. I see.
Martin: Now it depends if you're having withholding tax on your salary.
That withholding tax will be considered as a prepayment towards that final bill.
Kathrin: Yes.
Martin: If you don't have a withholding tax, then you already had the chance to pay taxes before that on a provisional bill. So if you don't have withholding tax, you receive a provisional bill during the year and you're able to make payments towards that future final bill already in the current year, for example.
Kathrin: Yes. Which makes sense because otherwise you might be hit with a massive bill that you haven't anticipated or it's a bit difficult to pay off all at once.
Martin: Yes. So you, you definitely have to anticipate some taxes if you don't have a withholding tax. Sometimes for people who are not used to it, it's a bit difficult as well. For example, if you have withholding tax on a B permit and then you receive the C permit and suddenly you have much more money in your bank account, which is fantastic.
Kathrin: But it's not really all of it your money, so you've got to give some of it back.
Martin: Yes. You always have to account for the taxes as well. And to get into that... so the responsibility basically shifts from your employer to you as an individual to pay the taxes. And I see it often that some people are struggling in the first year to get used to it. What I would do, there's several ways to do it. Either just put some money away for taxes, maybe open a separate bank account for yourself where you basically put your money in the bank account. You can also pay it directly to the tax authorities.
Kathrin: Oh. You can pay it in smaller chunks ahead of time.
Martin: Yes. Yeah, that's what I'm doing. So I have a standard order, I send money to the tax authorities on a monthly basis.
Kathrin: And then at the end they calculate if you've already sent enough or if you need to send a little bit additional?
Martin: Yes, correct. So they do then the accounting at the end. So when they send the final bill, they check what you paid on a provisional basis. And then you either have to pay an additional amount or you even get some money back.
Kathrin: Yes. And we have a very similar system for self-employed people in the UK, and I then do the opposite with the bank account.
So, it works as long as you roughly know what percentage of tax you might need to pay, you can then each month put away the correct amount. And then it's relatively easy, just as long as you don't consider it like, your own money.
Martin: Yeah. Don't spend it!
Kathrin: Yeah. You might struggle, but even if you do, an accident can happen, you can then extend the payment deadline or pay it off in chunks, right? Is that right?
Martin: Once it's final, it's difficult to pay it in chunks. So usually, the final bill is due within 30 days, otherwise you would have to request it by the tax authorities. However, they don't have to agree it.
Kathrin: Oh, it's up to them then whether they want to allow that or not.
Martin: Yeah. You need to have good reasons for doing that. You might even have to provide a budget to show what you pay in terms of rent, in terms of phone bills.
Kathrin: Oh, I see. To prove that you can't actually pay it right now?
Martin: Yeah.
Kathrin: Okay. That's interesting. So that's one thing to be aware of if you're new to Switzerland, or new to this system.
And then also something I know people are worried about occasionally is international taxation. So if you come from a different country, you might worry if you're registered in both countries or how's that gonna work? Might you be taxed twice?
Martin: Ideally not. Switzerland has with most countries a double tax treaty. With some not. However, I think important is, if you move to Switzerland for example, 1st of June, you would only be taxed on your income from the time you become resident in Switzerland. So from 1st of June on. In that year, you would also file a part-year tax return, which only starts on 1st of June until the end of the year. So whatever you had in terms of income before your effective moving date to Switzerland is not gonna be declared.
Kathrin: That would then be taxed in your old country?
Martin: Yes. Most likely.
Kathrin: Yeah. But then I suppose you de-register in the other country and then you register in Switzerland. And then hopefully, there won't be any issues with that.
Martin: Yes, correct. And then sometimes you have some trailing income as well. So for example, you still receive a bonus in the next year, which still relates to your work from abroad. That can usually be exempted from taxation.
Kathrin: Oh, I see. Because it then will have already potentially been taxed in the other country as well?
Martin: Yeah.
Kathrin: Yeah. Okay. That makes sense.
Martin: And then there are some other specialties, but we can look into that on an individual level then.
Kathrin: Yes, I think so. I think then those very specific things will require a personal meeting with you.
Yes! Excellent. So let's talk about if people have follow-up questions or they do have one of those special issues and they wanna reach out to you, how can they get in touch?
Martin: Various ways. Either it's martinbeiner.com. That's my homepage. Also I have a second one, it is called itstaxtime.ch.
Kathrin: Okay excellent.
Martin: Or the easiest way, also via Instagram, Tax Time with Martin. That's where you can find me, and follow me. There are also some tips from time to time when it comes to taxes. However, if you listen to that podcast there.
Kathrin: You already know all the tips.
Martin: You almost know all of it. Yes.
Kathrin: Excellent. And then what services do you offer? Do you complete tax returns for people?
Martin: Yes, correct. So I complete tax returns. As I said, I see myself rather as someone who guides you through the tax jungle, so I'll also help you to understand when you receive the assessment, when you receive the final bill. To help you to account for the final bill, for example, what we discussed before.
Kathrin: Yes, exactly.
Martin: So that's how I see my role as your tax advisor. And obviously also prepare the tax return. If you are keen to do it yourself, I often do also just reviews of tax returns.
Kathrin: Oh, I see. So you do it yourself and then you just have a look to make sure everything's in order?
Martin: Yes. And then we can go through it and discuss it again, before you send it off so that you can sleep well at night.
Kathrin: Excellent. And one thing also that you offer, I think if someone would prefer to do it themselves, is a course, isn't it?
Martin: I have a course on my homepage. That's giving you a bit more of an insight. So what we talked about today is quite high level. If you want to go deeper into the tax system of Switzerland, then you can also book my course on the homepage.
Kathrin: Amazing, yeah. So then that might help people with maybe not super complicated returns to do it themselves.
Martin: Yep.
Kathrin: Excellent. Thank you so much for joining me.
Martin: Thank you for having me. It was fantastic.
Kathrin: Yeah.
Martin: Yeah. And call me if you have more questions.
Kathrin: Yes. Call Martin if you have any tax questions!
All right, that's it for today. So, thanks once again for listening. We'll include links in the show notes to our guest and to further materials about some of the topics that we've spoken about today. If you enjoyed the episode, please leave a review on your favourite podcast platform.
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