How to report (an undeclared) life insurance policy from abroad in the latest tax declaration?

Taxes
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Hello Everyone,

I have a question regarding the tax declaration of a life insurance policy. I would like to avoid/fix a past mistake and hence asking for the help/clarity via this separate thread (as a first timer).

Background: In 2015 I bought a life insurance policy in my home country (non-EU) and paid 5 premiums until 2019 (say total premium 15k CHF). The insurance policy is of type Unit Linked Insurance Plans (ULIPs) with a premium duration of 5 years and maturity duration of 10 years.

I paid these premiums in my home country using money that I earn in Switzerland (2015 to 2019). I have not received dividends or interest so far. I am supposed to get lumpsum in 2025. Let’s say the insurance fund value today is 20.5k CHF.

Since 2020 I started paying taxes in Switzerland but I didn’t realize/forgot to declare this policy during the tax declaration of the last 2 years. I have the following questions:

  • If I am not mistaken, a ULIP life insurance policy is similar to pillar 3b in Switzerland and it’s subject to wealth tax. Right?

  • In my home country, the financial year is from 1st April 2022 to 31st March 2023. This means I have a policy statement & fund values for 31st March 2023. Is it Ok to submit such a statement and use the value from March 2023? Or, should I precisely calculate the fund value on 31st December 2022 by checking historical rates? (I have same problem for bank accounts from my home country!)

  • As this insurance policy was not declared in the last tax declaration and premiums were paid from my foreign bank accounts (during 2015-2019), do you think I should write a short note mentioning I forgot to declare this last year and also provide some proofs showing money used for premiums was from my Swiss income?

  • A minor thing: In Vaud tax website, in life insurance declaration there are two fields: AnnĂ©e de conclusion / Year of Conclusion (facultatif) and AnnĂ©e d’échĂ©ance / Maturing year (facultatif). What’s the difference between these two dates? In my case, I only know the “maturity date” of my policy:

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  • I guess even if tax office will apply wealth tax retroactively, I guess impact won’t be huge considering the amount is just ~20k CHF.

Probably simple/naive questions but thought better to ask them here in advance!

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I don’t want to go into many details here. But there is a thing called Dénonciation spontanée or Straflose Selbstanzeige (punishment free self-reporting).

Example for BE:
https://www.sv.fin.be.ch/fr/start/themen/steuersituationen/straflose-selbstanzeige.html

It doesn’t seem to be too big a deal.

Either look for one of the keywords on your Canton’s site or call them and ask them how to report it. There should be no problem.

Make sure to report every other forgotten asset, such as foreign bank accounts or property, or income at the same time and use it as an opportunity to clear the table.

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Hi there, sharing an experience of self reporting I did this year.
I realized I had an Investment Fund in my original country, which I totally forgot I had, and declared it as part of my 2023 report. I reported the dividend and YE values over the 7 years I’ve been living in Switzerland.

First of all, I agree with the above post. Self-reporting is much better than being found out.
You will indeed get a penalty, and in my case I had undeclared dividends as well, which then I had to pay interest rates (quite a high %) across the years (eg. 6y worth for dividends coming from 7years ago, I think you won’t have this issue as you are not receiving any dividends/interests).

Secondly, my interaction with the person that did my Tax re-calculation was great. I received via post a re-calculation, I asked some questions over email (google translated) to the person that did this re-calculation, and I got very detailed responses, allowing me to find out that I declared incorrect values. So don’t be afraid.

To your questions:

If I am not mistaken, a ULIP life insurance policy is similar to pillar 3b in Switzerland and it’s subject to wealth tax. Right?

Yes my understanding as well.

Is it Ok to submit such a statement and use the value from March 2023? Or, should I precisely calculate the fund value on 31st December 2022 by checking historical rates?

I don’t think they would mind, but if you are unsure, I would just ask yourTax office, or add a note that you used the March value.

do you think I should write a short note mentioning I forgot to declare this last year and also provide some proofs showing money used for premiums was from my Swiss income?

I would add a note that you forgot to declare the said life insurance from 2020, and add the values of the insurance per year (as you don’t want them to use this year’s value for all the years). Make it as clear and easy for them to understand as possible.
I don’t think you need to prove that you paid premiums from your swiss income (not sure if they care where you pay from) since this is wealth tax, and it does not matter where the wealth sits in the globe.

not sure about the last quesiton sorry. Good luck!

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Thanks @Basil321 for sharign your experience!

I would like to provide an update from my side as my 2023 tax declaration is processed now:

In brief, I just reported the fund value by looking at the yearly statement. I didn’t think too much (fiancial year difference, etc) as I didn’t receive any divident. This was accepted by the tax office without any further question.

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