Interest on tax bill when pending for a correction?

Taxes
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Dear All,

In 2021, I was taxed at source and paid approximately 30K CHF. In September 2022, I received an tax bill for 7K CHF that I need to pay.

My tax advisor identified a mistake: the source tax paid with Chômage was not accounted for. He discussed the issue with the tax officer, and my tax advisor informed that I will receive a corrected bill (approx 6K CHF) and then pay the new bill.

After two years, now I received the revised tax bill, but I see that has included two additional charges:

  1. Intérêts moratoires sur decompte ICC: 2400 CHF
  2. Intérêts moratoires sur decompte IFD: 450 CHF

From my understanding, “Intérêts moratoires” are interest charges applied when taxes are not paid on time. But, if I was awaiting a correction from the tax office, should I still be responsible for this interest on the pending amount? And that’s the interest charges total 2.8K CHF on the pending ~7K CHF bill?

Over the past two years, I have contacted the tax office 2-3 times to inquire about the status of the corrected bill and they told me they are working on it. I did not intentionally delay the payment. I thought I need to wait for correction (2021 is the first time when I filed the taxes).

Today I visited the tax office (Vaud), and they advised me to write a letter to contest the charges, which I plan to do. But I am wondering if I have made a mistake, and such penalties are still applicable despite the tax office has told me they are in process of making correction during last 2 years.

Thank you very much!

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The tax at source paid when unemployed shall have been credited against your final tax bill or paid to you and then paid back to the tax authorities (tax at source vs regular taxation don’t talk a lot)

Where is the tax at source paid when unemployed?

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I am going to assume that you received a tax bill of 7K because you actually filed the income tax return. Otherwise not sure why would you get a tax bill in first place

If you did, then you already knew at time of filing IT return that you owe 6K to the tax office. You should have paid the tax then. I mean the 6K

As far as I understand , this is how the process works. And thus you got charged interest for late payment. You didn’t really need to wait for final corrected bill to arrive to pay the bill you thought you should have paid.

But your case seems to be the one of not having full info. So perhaps you get a waiver. Good luck.

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4

I think depends on cantons (as usual). For some cantons you only have the punitive interest once you receive the final bill.

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In ZH regardless of whether taxed at source or not you are supposed to have paid you tax bill per 30.09 of the current tax period (even if it ends on 31.12 !!) and interests start being charged to you on the difference between what you owe (i.e. the amount calculated once all the process is finished) and what you paid. If your tax return takes two years to be closed and you paid less than the final bill, interests will be accrued over the period on the difference. That is why you should always pay more than the estimated amount if you do not want to owe interests to the tax office.

Of course it can also make sense to wait until the bill is issued to pay everything if your investments yield more than the interest rate to be paid ^^.

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I think you need to clarify what this means.
For income from 2024, all the tax needs to be paid by 30 Sep 2024 ? Or 30.Sep.2025?

I don’t think you need to pay tax before you even earn the money.

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For the tax period 2024 you need to have paid by 30.09.2024 if you do not want to pay interests on top of the taxes. I have completed 15 tax periods in the canton of ZH and have seen as many interest statements from them, you can trust me on that one. This only concerns people doing a tax return of course.

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Tho the interests due from September are not punitive (only 1%) unlike those past the final bill. My guess is that OP had the punitive interests applied (2k for 7k owed for a few years).

(If it’s regular interests there’s really nothing to complain about)

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You are right, given the amount we can indeed assume those are the punitive ones, but looks like the rate is 25% per year ?! if it’s 3k out of 7k over 2 years… That looks wrong, in ZH that’s 4% I believe.

I always pay more just to avoid any problems like this as I also received once a bill with 150 CHF interests on top of what I owed.

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10

Ok read the whole thing for Vaud.

edit: looks like it’s actually for any bill (provisory or not), so it still does seem kinda high for only two years.

In Vaud you get the punitive interest (currently 4.75%) on any bill you don’t pay (even those from the estimate during the year for those not taxed at source).

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Thank you @nabalzbhf @HoiZame @Abs_max @Guillaume_GVA for responses! Appreciated!

To answer some of questions and add clarification:

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I see the above in receipts from Chomage. So that was deducted directly from the chomage payment as tax at source.

My tax advisior reported both impôt à la source from salary certificate and from chomage. But the tax officer didn’t consider the contributions from chomage and hence that needed to be corrected.

(By the way, new bill I received this week is also without correction that was asked in September 2022! I verified calculations and somehow impôt à la source contributions from chomage is not still accounted. But that is separate topic and I need to get back to them I guess.)

Yes, this was bothering me as well! But as this was my first experience with the tax office in 2022, I asked explicitly below in 2022 to info.aci@vd.ch to clarify what I am supposed to do:

If I understood correctly, I am supposed to receive new tax documents with the corrected balance. Could you please confirm that I will receive new documents from you and I don’t need to pay anything until then?

And the tax officer replied me just below in French:

Once the corrections to your file have been made, you will receive the new decision.
Thank you for waiting and best regards

This was the same answer when I followed up 2 times until end of last year. My tax adivisor, who filed this taxes, also told me “don’t pay this bill until you receive correction”. So I thought its normal to wait for correction.

As I mentioned, this was for the year 2021 and I got bill in Sept 2022. I was waiting for the carrection to happen until now.
Edit: ~30K were already paid as part of the tax at source. Additional 7K then needed to pay after the decision and I was waiting for the correction.

I will discuss this with the tax advisor who filed this taxes in 2022. Only thing that bothered/confused me is that I followed up on this topic with the tax officer at Vaud office 4 times during 2023 and I didn’t receive any new info or reminder for pending payment. After 2 years, new document with additional interest payment of 2.8K!

I will update this thread when I will get an answer! Thank you again!

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You are supposed to pay your taxes on a defined date which differs from cantons, no matter what happend during the tax procedure.

Even if the taxation is corrected in your favour, you were supposed to paid the part you didn’t challenge on that defined date, otherwise you have to pay interest.

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Are you referring to the provisional taxes (the prepayment for the current year)? The provisional taxes in ZH I’ve always paid at the end of the year and never seen any negative interest on the final bill.

If its about the final bill, there you already have to pay negative interest from the 1st of January if your provisional tax payment was lower than the final one, no?

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I’ve been told by my tax office, that they wont charge the interest, if it’s less than 50 CHF.

For the final bill they will start charging interest (4.5% p.a.), if it’s not paid within 30 days.

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You see that in the details of the interest bill. In Zürich the date as of which they expect you to pay is always 30.09 of the current year. It of course depends on your Canton of residency. In ZH they will apply the negative rate even if it’s 10 CHF, at least they did so to me.

This info can also easily be found on google:

Stichtag für die Fälligkeit ist in der Regel der 30.September des entsprechenden Steuerjahres. Nach Fälligkeit werden im Umkehrschluss Ausgleichszinsen für ungedeckte Steuerbeträge (Differenz zwischen definitivem und einbezahltem Steuerbetrag) geschuldet.

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I don’t recall having ever seen an “interest bill”. But I see now that for ZH you indeed have some interest after the 30.09. if you don’t pay the provisional taxes. However, until last year, that interest was 0.25% and therefore you made the better deal to keep it on a bank account with e.g. 1% (in my case Yuh) interest and then pay the tax interest with part of the interest you get from the bank.

This year, ZH increased this “Ausgleichszins” to 1%, hence you don’t “win” anymore if you keep it at Yuh, but you also don’t lose (Yuh still has 1%).

Note that this does not apply for the final bill, where you have 30 days to pay otherwise you start paying 4.5% interest.

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At least in ZH you receive a separate sheet “Zinsabrechnung” with a summary of the different payment value dates and the relevant interest periods in days ; the calculation is up to 5 rappen ^^.

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Funny, I had a similar case 3 weeks ago. I just sended an email were I asked why I should pay the interest as it’s their job to give me the tax bill in time. They answered: You’re right, we apologie, just pay the tax without interest. (Canton JU)

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I just wanted to provide an update on this topic, as it might help others in similar situations:

  1. I visited the Vaud tax office and asked for clarification about the high interest fees (intérêts moratoires).
  2. I couldn’t ask for or understand all the details, but my impression was that the officer was also unsure about the high fees/calculation. It seemed like they hadn’t considered my tax payments at source while calculating the interest.
  3. He advised me to contest this by simply writing a letter with a brief explanation.
  4. In my case, I had paid 31K, and the remaining amount was around 6K. Over the last 1.5 years, I had sent 3-4 emails asking for an update. I had also explicitly asked if I should pay the bill, and they indicated that I should wait.
  5. I explained the above in a short letter and sent it to the tax office. Within one week, I received a new tax bill with the interest (intérêts moratoires) removed! :tada:

I am happy with the efficient and considerate response from the tax office!

I would also like to thank everyone here for providing responses and input!

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