Tax at source (quellensteuer) vs. yearly tax - interesting case

Hello everyone,

I live in kanton Zug and in 2020 I have been paying monthly quellensteuer.

I earn quite a regular salary, however I had 2 very nice months in the year when my monthly income was CHF 30,000 (due to stock options exercise and bonus). This caused my monthly income tax rate to increase from around 5% to 20% in these months.

Is there any practical solution to flatten out my tax rate by submitting some request to assess my income on a yearly basis? And if so, would it be beneficial at all?

Many thanks for some insight tax wizards!

If your income for the year was above 120k, you have a wealth > 100k, or you had more than 2k of non taxed at source income (e.g. dividends) you shouldn’t have the choice and you’ll have to declare anyway (you might have to voluntarily reach out and ask for the form if you’re on the two latter cases).

Otherwise it’s up to you, but you need to do it before end of March. If you don’t have a filing obligation, you can check the city tax calculator to check which one is more favorable (it depends on many things, including whether the city you live in is above or below the cantonal average).

Summary for Zug tax at source obligations: https://www.zg.ch/behoerden/finanzdirektion/steuerverwaltung/quellensteuer/download/copy3_of_form_172-2020/download

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I was in a similar situation a while ago (while on QS).
I did the calculation and additionally inquired with my HR about such an alternative.
It was
a) not possible on their accounting side (to “flatten” the taxation throughout the year)
b) actually better off with a higher tax rate in that 1 month (of bonus payout) and lower in the remaining 11; vs. the “in-between” one calculated throughout the whole year (even though logically it shouldn’t matter, in practice it did)

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Thank you guys, I think I will just forget about it and enjoy life then :slight_smile:

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