Tax Optimization

Hi all,

I have a silly question. I’m taxed at source, and this is advantageous to me. Hoewever, my fortune is about 10KCHF too big for taxation at source. Theoretically, this would mean that i have to fill request the complete taxation (i.e. no longer taxation at source). I have done the simulation and found that regular taxation costs me about 1kCHF more than at source (mostly due to COVID/WFH reducing what I could consider travel and work expenses)

In other words, I need to get rid of 10KCHF to save 1KCHF in taxes. Crazy right? If I want to avoid this, I see two options:

Option A: Is it legal to arrange for a transfer of this 10KCHF to a friend, thus avoiding the entire hassle?

Option B: Would it even be possible to do a transfer from one bank to another bank. If I’m not mistaken, the amount is debited right away but by the time it arrives at the other account, one working day would have passed, thus not showing as being in my possession for either bank account.

It feels dodgy, and I’m ready to pay my dues if I have to - but the effort and money required seems silly compared to the sum that I’m over the allowance. Are either of these options legal? Is there possibly a better way to do this?

NB: I’m in a special situation where my taxation would occur End of March (and not End of December)

Why would it - shall I be your friend?

I was generally under the impression that making active efforts to avoid paying taxes would be considered tax evasion.

During the only tax course i took at uni, there was talk about “transactions/structure insolite”, i.e. structures or transactions that don’t make any sense other than avoiding taxes.I was wondering if this would fall under that.

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I think it is, I wouldn‘t bother trying to cheat the system. You might not like the consequences that come with it.

Agreed.

However, if I’m your new friend (it could also be your significant other or daughter), it can make sense for non-tax reasons to gift some of your wealth to him/her.

If I promised to pay you back the 10 grand - that would start to look very dodgy again, indeed!

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I don‘t think you‘d be allowed to have a promise on any payback, otherwise you‘d need to declare it as a loan.

Hi wirpo032,
There is another option which ist completely legal. If you are affiliated to a pension fund, you can probably make a volontary purchase of 11k. Since the amount in the pension fund does not count as taxable assets you will still be taxed at source. Other positive effect is that these 11k can be deducted from your taxable income. That means a deduction of 3.3k of your taxes (with a marginal tax rate of 30%).
If I were you, I would contact your pension fund to ask them if it is possible for you to make such a volontary purchase.

4 Likes
  • Buy some long conservation food and hygiene products when they are on sale. That would be a lot of cans.
  • If your relevant wealth for tax-at-source is calculated the same way it is for the wealth tax, then buy assets that have a tax-value lower that their actual value (ex : real estate funds that owns their buildings with the direct method).
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If you want to go down that line, you’d not add anything to your wealth for ever? Is that really your goal?

Huh? I thought you’re always taxed at source until you get a C permit, no? No matter if you fill the tax forms or not.

most cantons if you earn more than 120k brutto you’re filling out the normal taxation forms. i believe they still do the source tax but make a correction based on the personal declaration.

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I think you can still declare public transport cost, even if you work from home, including the 700 franks for your bicycle.

Buy a nice new car. The minute you drive out the showroom, the value drops by 30%, and you’ll be under your desired limit.

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You could also pay the 10000 into 2 3a pillar accounts. There is no law to prohibit overpaying, the only limit is for maximum deductions. But that way you will pay only something like 200-300 whenever you withdraw it instead of 1000 now and it is fully legal. Or even you will pay 0 if you don’t have a lot and you plan to move abroad, for example Geneva has 17000 tax free for 3a withdrawals if you move abroad. But in any case there is not much point in trying to delay the inevitable, you will eventually make a tax declaration unless you plan to follow full scale tax evasion, next year your additional wealth compared to the limit will grow bigger and bigger if you are a mustachian. Just move to a lower tax town if you want to avoid paying more than the tax at source.

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Federal tax administration begs to differ:

“Auf Vorsorgekonten und in Vorsorgeversicherungen können nicht höhere Beiträge einbezahlt werden, als ein Abzug gemäss Artikel 7 Absatz 1 BVV 3 zulässig ist. Bei der Beschränkung des höchstzulässigen Einzahlungsbetrages geht es auch um eine Beschränkung der Steuerbefreiung bezüglich der Einkommens-, Vermögens- und der Verrechnungssteuer. Die einbezahlten Beträge sind von der Vermögenssteuer ausgenommen und die Erträge daraus unterliegen nicht der Verrechnungssteuer. Sind überhöhte Einzahlungen vorgenommen worden, fordert die Veranlagungsbehörde den Steuerpflichtigen auf, sich die zu viel einbezahlten Beträge vom Vorsorgeträger zurückerstatten zu lassen. Die Vorsorgeeinrichtungen bezahlen nur den nominellen Überschussbetrag zurück, der auf diesem Betrag aufgelaufene Zins wird nicht zurückerstattet. Für die Veranlagung wird der nicht zum Abzug zugelassene Betrag dem Einkommen sowie bei Rückerstattungspflicht dem Vermögen des Steuerpflichtigen zugerechnet. Steuerpflichtige, welche eine Rückerstattung nicht veranlassen, unterliegen dem Risiko eines Nach- und Strafsteuerverfahrens, da in den Folgejahren die Erträge aus den überhöhten Beiträgen beim Einkommen sowie die überhöhten Beiträge im Vermögen nicht deklariert sind.”

Seems to be correct, strictly speaking.
It just wouldn’t save you any taxes (legally).
There’s even cantons providing “guidance”.

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My mistake then, so it‘s 6883 for 3 pillar, the other 3 thousand can be gift cards of your favorite grocery store, airline, Amazon etc. for the next year or two.

Strictly speaking that would be declared as part of one’s Vermögen, no? It’s a credit you hold from someone else. Then you might as well just withdraw a few 1000 cash and put it under your pillow and forget it, which would be the easiest solution, but no-one dares mention, because illegal. And I’m just mentioning it here as a comparison to the gift card solution.

How about buying an expensive watch or art? Like stuff that retain value but would not count as wealth?

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As far as I know these specifically count as wealth.

Really, if I buy a 10k watch I need to declare it? I didn’t know that…

I could not find any official source but I found this article from PWC which seems to confirm it:

Other valuable assets, e.g. paintings, art collections, jewellery, etc. 

So I guess my idea was too obvious :slight_smile: sorry for that!

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