Income Tax at Source: changes in 2021

[chca]

I’ve been informed by my employer that as of next year anyone who is taxed at source can ask to be retroactively taxed (at the beginning of the following year) filing a full return. Not sure if this is a federal thing, or a cantonal thing in response to the multiple federal changes.

This might be advantageous in certain cases such as for couples where one earns much more than the other, but I’ve not done the calculations.

Apparently there are a lot of changes related to at-source taxation coming next year (https://home.kpmg/ch/en/blogs/home/posts/2020/07/tax-at-source-2021.html)

Can anyone with some tax accountancy knowledge/interest explain the implications of these new rules?

[dbu]

To my knowledge, at least in canton BS, once you are over 120k income (and still on Quellensteuer, e.g. with a B permit), you have the right to fill in the full tax return.
Has been like that for quite a while, not sure if any changes from next year.

[chca]

Found a better breakdown on it… https://blogs.deloitte.ch/tax/2019/06/new-tax-at-source-legislation-federal-tax-administration-publishes-circular-letter-no-45.html

If I understand correctly, as of next tax year, to claim Pillar 3a contributions, etc. those taxed at source MUST ask to file a return (and then are obligated to do it). So the simplified taxed-at-source return form (a single page in my canton!) will no longer exist.

The circular cited is here: https://www.estv.admin.ch/dam/estv/fr/dokumente/bundessteuer/kreisschreiben/2004/1-045-D-2019.pdf.download.pdf/1-045-D-2019-f.pdf
Personally, I’m interested in the implications, but there is an infinite list of things I’d rather do than read tax law (and infinite number of professions I’d rather have than tax lawyer).

[chca]

Yes, I guess what it does is get rid of that minimum and also force people to file a full return to claim any reductions.

Last I looked, in my canton at least, the assumed deductions for certain things were already quite good (e.g., my actual transport costs are way lower than the assumed amount) so it might work out negatively for some and positively for others…

[MFV91]

AFAIK, the idea is that many people complained that it is not fair that people living in the same country and doing the same job are taxed differenty according to income and lenght-of-stay in the afore mentioned country.

I didn’t do exact calculations, but I compared with several swiss colleagues earning my same exact gross salary, and added deductions can be quite impressive (we’re talking about around 10-15% more taxes)…however, it depends a lot on the baseline tax % (canton-dependent) and on your job (ex: nighshifts, education-related expenses…).

I really look forward to save some money to be invested somewhere else than in Vaud government’s silly habit of remakig the roads every 2-3 weeks XD

[LeStache]

@dbu

To my knowledge, at least in canton BS, once you are over 120k income (and still on Quellensteuer, e.g. with a B permit), you have the right to fill in the full tax return.

And not just the right either but the obligation. All B permit holders earning over 120k should already receive the tax forms and have to return them. Except in Geneva where the limit is 500k. This has been in effect for at least 5 years.

[valentin]

In Zurich, I’ve just received a few days ago a letter from the tax office saying that I have 1 month to fill my tax declaration for 2019, even though in 2019 (my first year in Switzerland) I earned less than 120k.
What I find strange is that last year (2020) in March I called the tax office and asked them if I can do the tax declaration for 2019 and they told me that is not possible since I’ve earned less than 120k…

[nabalzbhf]

The amount is pro-rated by the way, so that might be what’s happening.

[Goyero]

most probably you earned more than 10K/month since you arrived in 2019, isn’t it? I think the 120K/year is for those living the full year, but for those that arrive during the year the proportion applies. In my case I arrived at the end of Oct 2017 and I had to fill the tax declaration for 2017 because I earned 30K in 2 months and a few days

[valentin]

According to my 2019 Lohnausweis I’ve earned since my arrival, 1st of April (so 9 months) a total of 79’377 CHF-Bruttolohn (only in the first and last month more than 10k/month). So doesn’t seem to be that. Also it’s a bit strange that they send it so late and give me only about one month to do it. For example, the letter for 2020 arrived a week before this one and I have until end of September to fill it.
By the way, do I need to declare also the income from the country (Spain) where I lived and was taxed between 1st January 2019 and 1st of April 2019?

[SwissTeslaBull]

GF in Basel salary around 100K with B and tax at source fills out taxes to get back 3a and working expenses… this for at least 2 years, so nothing new here. You don’t have to, but you can. Same I know from a friend in Bern.

[nabalzbhf]

@valentin

For example, the letter for 2020 arrived a week before this one and I have until end of September to fill it.

FYI I had exactly the same thing when I moved (got my taxes like 2 years after, with a 1 month deadline). If you want you can probably ask for a deadline extension (but if you had simple holdings, it shouldn’t take long to fill it out).

@valentin

By the way, do I need to declare also the income from the country (Spain) where I lived and was taxed between 1st January 2019 and 1st of April 2019?

Depends on the DTA between Spain and Switzerland, but if it’s like most countries, you don’t. Make sure to declare all your accounts though (since there’s a global wealth tax and there are sharing agreements between most countries so they’ll learn about it).

[valentin]

@nabalzbhf

…(but if you had simple holdings, it shouldn’t take long to fill it out).

It should be enough time. The only thing that I am waiting for is the breakdown of total costs from Swica. I know exactly how much I paid for the health insurance premiums, but I am not sure if I need to attach a proof or not. Actually since the 2019 letter came so late I don’t have access anymore to the full ZHprivateTax online app and I am using ZHprivateTax-Light 2019 which doesn’t seem to ask to attach any documents at all.

@nabalzbhf

Make sure to declare all your accounts though (since there’s a global wealth tax and there are sharing agreements between most countries so they’ll learn about it).

Will do!

Quick question:
Do I need to declare even the bank accounts that were empty or had just a few swiss francs at the end of the year? For example UBS creates for you a Saving account that I never used, Revolut can create multiple and so on…

[nabalzbhf]

@valentin

The only thing that I am waiting for is the breakdown of total costs from Swica. I know exactly how much I paid for the health insurance premiums, but I am not sure if I need to attach a proof or not.

Usually you need the proof, didn’t swica send you a tax form last year with the total premium paid?
(fyi the deduction is prorated and even with just the base insurance you’re likely already above the limit)

@valentin

Do I need to declare even the bank accounts that were empty or had just a few swiss francs at the end of the year? For example UBS creates for you a Saving account that I never used, Revolut can create multiple and so on…

I do declare them if they’re actual accounts, they usually ask you when they were opened so they might be asking question if they suddenly appear (plus I assume the data sharing doesn’t care about the balance).

(I personally consider revolut a prepaid credit card and my balance is fairly low so I never declared it, similar to the small amount of cash I have at home)

[valentin]

@nabalzbhf

…didn’t swica send you a tax form last year with the total premium paid?

Not for 2019. They sent one this year for 2020 though.

@nabalzbhf

I do declare them if they’re actual accounts, they usually ask you when they were opened so they might be asking question if they suddenly appear (plus I assume the data sharing doesn’t care about the balance).

(I personally consider revolut a prepaid credit card and my balance is fairly low so I never declared it, similar to the small amount of cash I have at home)

Thanks for the advice!

[fir]

I’ve seen there was a change for the asset limits for which someone needs to make a tax declaration. At least in Zurich the drop was massive, from 200000 to 80000 for single/ 160000 for married. If anyone in Zurich has more assets than that, they must self declare until March 2022, even with less than 120000 income, to make a tax declaration for 2021. It might affect some here. They seem to really want to reduce the number of taxed at source.

Source: Merkblatt des kantonalen Steueramtes über die Quellenbesteuerung von Arbeitnehmerinnen und Arbeitnehmern | Kanton Zürich

[Sparta]

TL;DR except for complete mustachian newcomers now Uusländer should/must fill a tax declaration
That was actually one of my upsides for switzerland, as i counted on being “tax-declaration free” for the next 5 years until permit C or so.

I wrote to Steuerverwaltung Kanton Zug about the new rules and after this bureaucrat played “information ping-pong” with me the picture seems to be from 2021:

• over 2000CHF side income (dividends, side jobs working saturdays, selling your old stuff, even Firefighter service pay!!) —> you have to declare
• Pillar 3a: —> you have to declare
• More than 100.000CHF wealth globally —> you have to declare (if i understood his mail, now also cars are included? Thought this was only in Zurich before)
• Salary over 120.000CHF (even pro rata so 10k per month) —> you have to declare (just as it was the last years already)
• property in Switzerland —> you have to declare

So after all it did not change that much but come on, show me a person that does not check one of the boxes above. Cannot be too many people left.

[chca]

The only new part of that is new is filing full return forms to get pillar 3a deduction …used to be a simplified form (still is for 2020 tax year). You still don’t actually need to file in this case, but you would be stupid and not get the deduction.