I own a property in the NL and I declare it in Switzerland. When declaring the rental income I am unsure if I should declare the net rental income (eg. gross - taxes paid in the NL - maintenance costs, etc…) or if I should declare the gross income only. It would make sense that I only declare the net, but I am trying to find a confirmation. Any opinion/ experience ?
Afaik same rules as a domestic property, you declare the gross income and use whatever rules are used in your canton for deductions. (Can be a lump sum)
Taxes are definitely not deductible.
The income isn’t taxed in CH anyway (but used to determine the tax rate)
Thanks for the feedback - to explain the rationale of my question… in the NL in the last 3 years taxes on real estate multiplied by 4 with the end result of having a property today that yields a rent that I basically transfer to the Dutch tax authorities. Hence getting an increased tax rate in Switzerland for something I don’t see in my wallet seemed odd.
If your property isn’t returning the net yield you expect, you should probably sell it. Swiss tax authorities won’t care if it’s profitable or not for you.
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You need to differentiate between income , costs and taxes . These are three different things.
In Swiss tax return , you can enter your gross rental income and your costs . You can use flat rate or provide proofs for actual costs.
The tax you pay in NL is not a component of running cost , it’s tax and has nothing to do with CH because real estate is taxed where it’s located
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Same situation, vacation home in Spain.
You declare the gross income and deduct whatever you can. Taxes are not deductible. I often reach to a negative income with the property when using the real cost.
It is only used to define your tax bracket, you never pay tax on that income anyhow.
Taxes are definitely not deductible.
Double taxation agreements exist to make this possible, e.g. via crediting them
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Yes but in the case of RE you are not taxed in CH for a property held abroad so there’s nothing you can claim back in your CH tax return.
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Even though you don’t pay taxes in CH the effect on your taxes in CH can be massive. One situation in particular can be painful: if you have a mortgage in CH a portion of the latter will be affected to your property abroad and some of the interests on your CH property will not be deductible in CH.
One way to cancel the effects on your CH taxes could be to create a company in between but that may have other drawbacks…
Double tax agreement is to avoid double tax.
Here we are talking about taxation in only one country
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I have started to rent out my property in Italy. Someone has a similar situation with a nice excel sheet already for income/deductions and maintenance?
Double tax agreements lay out who may tax what, and how the other country can deal with it.
With property in one country and a tax resident in the other country, this is a clear case that DTAs deal with.
Yes and that’s why there is no double taxation in first place for RE. So there is nothing to deduct or compensate
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