Correction of Tax at source

Hi everyone!

I’m wondering if anyone has experience in filing a correction of tax at source in any canton? I’m not able to find enough information about it on the official website of my canton (Vaud).

I have three specific questions that perhaps someone could help with:

  1. For all the tax deductions (e.g. transportation, lunch at work, etc.), do I need to summit receipts together with the filled and signed form, or do I automatically get the maximum deduction as long as I declare it?

  2. Can I still apply for a deduction on transportation if my employer pays for all/ part of my transport costs?

  3. I changed job during the course of 2019 and took 1 month off in between jobs. (I worked for only 11 months out of 12 in 2019) There is also a huge difference in the salary I get in these two jobs - my current job pays almost double of my previous job. Is it possible ask for a re-calculation of my tax based on my total salary over the year? I believe this will have a significant impact on the tax rate applied if I’m not mistaken.

I would also love to just hear about any of your relevant experience. Thank you!

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Hi,

I did my source tax correction in the past years only because of the 3rd pilar.

  1. I understood that the source tax % already are made taking into account the a certain amount of costs. Not sure what is the breakeven point but if you want to deduct real costs it’s better to be of a considerable amount. I used to have the CFF AG and I decided at the time not to take this path being the only thing I could deduct and it was CHF 340/ month. It think I also might be because I did not want to take risk (if you contest the tax you may also end up paying more and it wasn’t clear for me that breakeven point). I also think there is a cap on the real costs you can deduct, but not sure here.

  2. Good question. I guess the employer also presents it as a cost, so I would say you only can declare the part you pay. I think is a mather of common sense or good faith (but I also would be tempted to declare the full amount :smiley: )

  3. every month you paid the % corresponding to the salary you had at the time. If you now take the total amount and check the yearly %, the amount should be pretty much the same.

Thank you so much for sharing your experience. Do you remember how long it took for you to get the tax refund after you declared your 3rd pillar contribution?

Hi,

I used to do it every year, and they were pretty quick in Vaud, just some months but your mileage may vary.

You just have to filed a “simplified tax return” as per these instructions. Here is the form in question. As you can see, you can only claim transportation costs, pillars and some other small deductions. Check in particular if you can deduct any training or education you have paid for yourself.

In Geneva it takes a few months. I think it’s done in March and I got the refund around October. A couple of years back I was working in Vaud (and already living in Geneva) and I think it took 3 years…

From the calculations I made last year you get about 20% on what you put in 3rd pillar regardless of the amountm, at least on my income range, that is not great (about 70k gross)

Does anybody know how to report the dividend income on this form?
This is the first year I have dividends and I am not sure how to report them. I have IE funds so there is no withholding to recover.

Well, actually you shouldn’t. It is a simplified tax return form, not a full one.

Be careful, if you declare that you have stocks, then you have to file a full tax return where they will deduct what you’ve paid at source. This means that you would be taxed at the regular rate, not the “at source” rate which, depending on your situation, may be at your disadvantage. According to this you have to file a regular tax return if:

  • le revenu annuel brut soumis à l’impôt à la source du contribuable ou de son conjoint, qui vit en ménage commun avec lui, excède le montant de 120’000 fr. ;
  • le contribuable perçoit d’autres revenus qui ne sont pas soumis à l’impôt à la source (rente de veuf/veuve, revenu provenant de l’activité lucrative indépendante, revenus immobiliers, etc.) ;
  • le contribuable a de la fortune (mobilière et/ou immobilière en Suisse et/ou à l’étranger).

Thanks for the links! Do you know if I need to provide receipts for transportation costs/ lunch expenses?

In fact, I have another question regarding dividend income.

I come from a country where they don’t tax dividend income. If I open an investment account in my home country and earn dividend income there, I assume I will need to declare it in my Swiss tax return. (Is this correct?) But if I do so, will the dividend income be taxed at the Swiss rate (35%)? I read that there’s a double taxation agreement between Switzerland and my home country, which has set the tax rate at 10%. I don’t quite understand how it is applied and on what. Does anyone have experience in this sort of things?

Thanks again!

Well If you don’t declare them, you are hiding things from the tax authorities. While this is not technically a crime in CH, they will eventually find out, and you can be charged back taxes and a fine.

I think I will drop them an email and see what they say.

Well, yes and no. It depends on the amounts. For small amounts in dividends and small fortunes they won’t appreciate the extra work. The “at source” rate with the eventual corrections already takes some assumptions into account.

The rules say that if you have over 56kCHF, your salary is over 120kCHF p.a. or have other (significant) revenue that is not taxed at source then you are taxed at the ordinary rate.

Also, once taxed at the ordinary rate you can never go back and you will have to fill a full tax return every year regardless.

Disclaimer: I was transparent with the tax authorities because I already had some stocks and have always filed a regular tax return when I was taxed at source as a B-permit holder.

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