Gifts and tax declaration

I (resident in Kanton Zurich, non CH citizen) received gift from my father (non CH/EU citizen and non CH/EU resident) last year. It was his personal funds. Landed directly into my bank account in Switzerland. How do I declare that in Zurich Tax declaration?

Also, would I be taxed? As per this document I think I would not be taxed on receiving this gift.

PS: my bank asked me the source of funds both verbally and on paper to be signed and declared which I did last year ( the amount was sufficient to trigger anti money laundering procedures in the bank side)

There is a section called Gifts in income section in Zurich taxation. You can declare it there. Gifts from parents should be tax free in ZH.
Other than the bank transfer, do you also have other document like GIFT DEED or something ? IF yes, then you can attach it. Otherwise make sure you attach copy of bank transaction.

It would be good to share what finally happens in this case. It can be a good learning for everyone for how to proceed in such cases.

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Even before looking at the relationship between the donor and the receiver, the gift tax liability in canton ZH exists only if the donor is resident in the canton or the donation is a real estate property located in the canton. A non-Swiss-resident gifting you cash does not produce any Swiss tax liability. If there would’ve been a tax liability you would’ve needed to file a special gift tax declaration.

In your normal yearly tax declaration there is a section to declare inheritances and gifts - you will need to add the gift you received from your father there. It is basically a mere FYI to the tax office to explain the increase in wealth

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Does it mean if I have a friend who gives me 25000 CHf and he is located outside of Switzerland, then there is no tax liability on my side?

Assuming I am resident of canton zurich.

Why is that ? I would have assumed this to be the case for real estate. But for movable assets like cash, why there is no liability?

Not 100% sure rez is right?

In my understanding it depends on the relationship (parents, siblings, friends), it’s not always tax free.
There are tables you can consult for limits and taxed amounts.

Aren’t there “2 sides” to that taxation (giving and receiving side)?
Maybe rez is referring to the gifter not having to pay taxes if they are outside of CH?

I’ve been looking at regulations some time ago, and remember I purposely limited the amount incoming from my sibling (outside of CH) to 10k because of “reasons”.
Maybe I interpreted their writings wrongly. :sweat_smile:

If a friend gives you 25k (or any amount) CHF and he is located outside of Switzerland there is no Swiss tax liability (for anyone). There might or might not be tax liability for you or your friend from other countries (the country your friend is resident in, your and your friend citizenship countries, the country the cash was moved from/to, etc.).

Not sure why, I guess Switzerland does not consider money earned by someone else in another country to be relevant - and leave it to the donor’s country to tax it if appropriate. In general there is no Swiss federal gift or inheritance tax, they are left to Cantons to levy if they want. You can see the ZH rules here for example (you find the relevant part in the first pharagraph), but I think no canton taxes gifts outside of this rule (donor in the canton or the donation is the real estate in the canton).

If the gift falls under the scope of Swiss taxes then sure, you need to check the relationship and the amount, and it might be tax free. But this is not the case here, in this case there is just no tax liability to begin with.

ZH rules (and I admit that I am not 100% sure about all other cantons, but I think it is the same) say that for the inheritance/gift tax liability in ZH canton to exist one of the two things must be true:

  • The deceased/donor is resident in canton ZH
  • The inheritance/donation is a real estate property in canton ZH

None of these are true in this case, so ZH canton does not care

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I remembered the rules differently too. But @rez is right:

Nach bundesgerichtlicher Doppelbesteuerungspraxis ist zur Erhebung der Erbschaftssteuer auf dem beweglichen Vermögen grundsätzlich derjenige Kanton berechtigt, in welchem der Erblasser seinen letzten Wohnsitz hatte. Grundstücke, die vererbt werden, sind im Kanton zu versteuern, in dem sie liegen.

-- Page 4 in Erbschafts- und Schenkungssteuern (German)
by Schweizerische Steuerkonferenz on September 2020

So the Federal Supreme Court has decided which canton can tax:

  • For anything mobile: The canton of the deceased/donor
  • For real estate: The canton of the inheritance/donation
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