Provisional Tax... I'm confused

Taxes
1

Hello everyone, I am pretty sure this have been asked a few times but I’ve only found posts about slightly different situations.

We are dual income couple on B permits, in canton Zurich. Our employers withhold income taxes at source, but because our income is combined together, our marginal rate is higher and we need to pay difference.

We’ve filed alredy 2 declarations but I as heard it takes couple of years to get final invoce from the tax office. We also received 2 times provisional tax invoces but they were way too low.

Provisional invoces state that there is 1% interest on owed tax after 30th of September each year. Considering that we already pay significant chunk at source, I thought that 1% over 3-4k that we owe on top is not worth paying upfront and then keeping it in the head.

After more reading I found statements that the ineretest is actually 4%. Then after checking
Provisorische Rechnung / Zahlungsempfehlung - Stadt Zürich I’ve seen that it is actually 1% for 2024 and 4% is triggered olny after not paying final invoce in 30 days.

Federal tax is 4% though from the get go, but we never received provisional invoices for it, only for canton/gemeinde. I assume this is becuase tax at source covers federal tax in the first place.
Statement is called “Provisorische Rechnung Staats- und Gemeindesteuern”. Does “Staats-” mean Canton or Federal in this context? :thinking:

Are there any other people with similar situation? :slightly_smiling_face:

2

The interests at Federal level are only due after the bill is issued so you should not be at risk there.

For the cantonal / municipality taxes you should be able to ask them to send you payslips to pay upfront even if you are taxed at source and also for the years where you see that you did not pay enough, and in any case, they will give you back the surplus you paid with the final bill. Interests should only be charged to you on the difference taking into account the value date of the payments done at source.

3

thanks for the clarification regarding federal taxes!

But now I wonder if Cantonal tax is 1% or 4%

4

My conclusion after reading all comments on other posts is following

  • never delay payment if you receive an invoice from tax office. This would most likely trigger penalty style interest
  • Before receiving a bill the interest seems like normal interest for eg 1% for 2024
  • always ensure you pay tax before or on 30 Sep if you are paying yourself (C permit).
  • Tax office is paying tax free interest which is higher than some banks :slight_smile: so better than cash in bank
5

nit: it’s unclear if that’s actually tax free (but I doubt they’ll bother given the amount anyway)

6

it’s 1% until you receive the bill starting 30.09 of the tax year and only if you do not pay within 30 days it becomes 4% starting from the date of the bill on the outstanding amount.

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7

I think so too. Not sure though

8

If I recall correctly, I usually pay the provisional federal tax after the tax year ended (see here where they say the federal deadline is 31. March). But I’m not taxed at source. But so even as a Swiss it’s hard to not get confused by all these different bills for the same tax year.

I would probably guess the amount you have to pay and do this on time. If you pay much more than what you should, you’ll get 0% (positive) interest on the surplus you paid while you would have gotten 1% on a decent bank account.

But especially as a foreigner, I’m not sure it is wise to optimize the interest too much with tax authorities by delaying payments. Those few CHF you gain would be nothing against the potential headache it can give you down the road if you miss a more expensive deadline.

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