I left Switzerland over the course of the past year. When declaring taxes (regular taxation, not at source), do I need to annualize my revenues? I left in March, do I need to declare the actual revenues or extrapolate them?
What about deductions (especially the “forfaitaire/pauschal” ones) - do I need to apply 3/12 to the total amount or can I max them out?
I asked my tax consultant the same question, she figured I needed to annualize my revenues, but seemed unsure about it.
This also feels a bit weird to me, because my revenues fluctuated a lot month-over-month.
You need to declare your actual income. The tax authorities will annualize your taxable income for purposes of determining the tax rate (satzbestimmendes Einkommen). However, that’s not something you do yourself as part of the tax declaration. Despite the rate adjustment you only pay taxes on the actual income, not the annualized one (anything else wouldn’t be fair).
For deductions it may depend on the type of deduction. For actual/effective deductions, it should be clear, declare the actual expenses without any pro-rating. Some blanket deductions are often either relative to the income or based on the number of days (e.g. meals), which shouldn’t require any pro-rating either.
For other blanket deductions such as management cost of securities or bicycle deduction, I’m not sure. Pro-rating could make sense in these cases. If in doubt about a particular deduction, don’t pro-rate it. The tax authorities should correct it if it’s wrong.
I’ll confere with the Geneva Tax Autorities on the bicycle deductions just to be sure.
There’s one thing that worries me about the annualizing revenues. I had quite a lot of unused vacation and overtime (about 6 months worth of it). These accumulated during the 6 years I worked at that place, during which my employer preferred I worked rather than use it. They paid out this amount
Do you figure they might annualize this kind of revenue as well? (I would argue it would not make sense to annualize this kind of revenue, because it would objectively be impossible to accumulate 6 months’ worth of overtime in 3 months, but I’m unsure how they might interpret the situation.).
As far as I know, yes, unfortunately, there is no distinction for such special cases. Ideally, the company would have paid out part of accumulated overtime every year. The tax authorities/software will simply annualize the taxable income. However, to be clear, the purpose of this annualization is only to determine your effective tax rate. That tax rate is then multiplied with your actual (not annualized) taxable income. This may still have a big effect, of course.
E.g. if your regular taxable income is 120k a year, your regular tax bill might be 30k, a tax rate of 25%. In these 3 months you had a taxable income of 90k (30k + 60k overtime). The annualized taxable income would be 360k, which would have a tax rate of 37%. Your tax bill would be 90k * 37% = 33k.
If the overtime wasn’t annualized, your tax rate might be 30% (annualized income of 180k) and your tax bill would be 90k * 30% = 27k. I.e. not annualizing your overtime would result in a reduction of 6k in this example but it would surprise me if this was possible.
FWIW, pretty sure they’ll fix any mistake you’d make anyway. When I was in this case, I used the software and the software didn’t handle it at all, they just corrected it manually.
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