Hi everyone,
I arrived in Geneva canton in 2022 and I’m taxed at source.
This January, after a careful evaluation and considering my situation is very simple (started investing in ETFs in 2023, no Real Estate, …), I decided to submit the voluntary tax declaration because I was supposed to get back around 2500 CHF.
The other day arrived a letter from the Cantonal Tax Administration stating that in 2022 I owed them 3050 CHF and they will reimburse me 1100 CHF, which is nice.
What is not nice is that when I compiled my tax declaration using GeTax the amount I owed according to the software was 1750 CHF, not 3100 CHF. So basically I’m receiving half of what I was expecting because I owe them 80% more than what I was supposed to pay according to the software.
How is it possible that the amount computed by the software is so far from the reality?
A possible explanation (?): probably a deduction that I added was not accepted (hence the huge difference), but they are not mentioning anything in the letter I received.
Also, with a 20% marginal tax rate, to increase my taxes by 1350 CHF I need to “lose” a deduction of 6750 CHF which is a lot (I checked and they considered my 3rd pillar, so it’s not that).
EDIT: I’m writing to the Tax Office, any suggestion is welcome! Thanks
Exactly! But I checked and the 3rd pillar contributions are deducted from both the federal and the cantonal/communal computations. So it does seem the tax office considered it.
Just a note, if you arrived from abroad, the deductions are prorated and the software doesn’t handle it for you.
Correct!
I only worked 9 months and in the federal tax computation they discounted only 0.75 (9/12) of the max deductible amount. Which is fair. In the cantonal/communal computation they account for everything (so not pro-rata based on the number of months I worked).
Problem is I only paid 150 CHF of federal taxes. So the fact that is pro-rata doesn’t justify 1350 CHF of additional taxes.
It’s impossible to respond without seeing the tax return you filled in, as well as the “avis de taxation” of the tax authorities.
We can only guess…and it won’t help you
I don’t understand you 1st message too.
→ OK
I don’t get it. If you go from CHF 2500 in your favour to CHF 1750 in favour of the tax authorities, why did you submit your tax return, subject to the TOU ?
If you’ve been a Swiss tax resident only for 9 months last year, this also affects the tax calculation. The taxable income is annualized (multiplied with 12/9) to calculate the tax rate, and then you pay the taxes for your taxable income based on that tax rate.
If you’ve been a Swiss tax resident only for 9 months last year, this also affects the tax calculation. The taxable income is annualized (multiplied with 12/9) to calculate the tax rate, and then you pay the taxes for your taxable income based on that tax rate.
It might be this! I need to check the letter I’ve received. Thanks for the input.
How nice of them to make me paying taxes for money I’ve never received: it doesn’t look fair at all.
Overall I consider it a fair system, although it’s not perfect. Your monthly spending capacity for these 9 months is not lower than if you had worked in Switzerland for the full year, so there is no reason why you should benefit from a discounted tax rate.
That’s pretty standard with progressive taxation (similar to how foreign untaxed income still impacts the tax rate).
But yes, it can be a surprise if you have a partial year, none of the online calculators or tax software handle those cases properly so you might easily make a misguided decision.
Overall I consider it a fair system, although it’s not perfect.
Well, I don’t see how taxing people on income they never received (I had no income before working here) is fair.
Also, imagine the corner case in which a person starts working in December for 1 month. It means that they will multiply his/her 1 month income by 12 and tax him on 12 times the amount he/she was paid. Basically, the taxes will be higher than the income itself.
But I don’t want to steer into a political/personal discussion. I’m going to check on the letter and with the tax office, but I think the situation is clear now. Thank you all for your useful comments, I’m never disappointed by this forum
The tax rate will be determined on the “pro-rated annual income” (e.g. turns out to be 20%).
And then that tax rate will be applied to the actual taxable income you had (e.g. 10k → 2k).
Now is much more clear, thanks for the explanation!!
Yep, now it sounds fair
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