Tax prepayment obligation (Staats-, Gemeinde- and Bundessteuer)

Taxes
1

Hi everyone,

I have a pretty basic question for which I cannot find the answer elsewhere online.
Living in Zurich, I recently received the Staats- und Gemeindesteuern 2020 recommended prepayment bill(s), but as far as I understand by reading and translating the text, it is not obligatory to prepay, or one can prepay as much/little they want.

This leads me to the following questions:

  1. Is prepayment mandatory?
  2. Can one prepay a smaller amount?
  3. Bonus question for extra kudos: Should I expect a similar bill for Bundessteuer?

The motivation behind my questions is the opportunity cost of not investing the money instead.

Thanks!

3

Bundessteuer you get the bill for the past year (eg 2019 bill in early 2020).

Afaik you can prepay less, tho interests in their favor start in something like October.

4

Hello everybody,

Concerning these monthly bills (acomptes in french) for next year taxation, do you know if instead of paying them it is possible to pay them all at once at the end of the year?

5

In most cantons you can pay the prepayment bills or not, and whenever you want.
You can (it is for ZH and BE, your canton may differ).

  • pay the whole amount at once and be done with it and earn a bit of interest
  • set up a monthly payment of your expected tax bill to the Gemeinde-/Kantonssteuer (Bundessteuer I am not sure; and I’m not sure it’s worth splitting it up it because it is usually a lot less)
  • wait for the final bill to arrive and pay at once, though you may face interest rate charges

Theoretically paying at the latest moment possible is best because you stay invested in the stock market longer. E.g. if your emergency fund is 50’000 you can just pay the taxes from that money and the rebuild the funds after the payment.

But practically, you need to set aside money for the taxes anyway and it is better if you still get 0.25 % tax free from your canton instead of 0.00 % from your bank.

I just divide the expected tax bill by the number of months and transfer that with a standing order to the tax authority. It gives me peace of mind.

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6

They give you the option of paying all at once by September 31st. Should be fine to pay in December but I guess the (little) interests start to be counted from October?

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7

Seems to me one only gets the Bundessteuer bill after the tax return is processed, am I right? I have still 2017/2018/2019 to pay…

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8

No it’s an estimate, I got the 2019 bill in Feb or March 2020, I hadn’t filled my tax report yet at that time.
(but since I was close to doing it, I was still able to go to the web and request a new bill which matches exactly what I’ll owe – assuming the tax office doesn’t make any corrections).

9

Then I am even more puzzled as to why the federal government does not want my money…

10

Have you figured out the federal tax situation? I’ve always been paying their “estimate” bills, but starting to worry now that they’ll add hefty interest on the difference. Or does this interest rate of 4% that they publish only apply to those who ignore their estimate bills?

11

Yes, you pay 4% p.a. only if you don’t pay the federal tax bills in time (within 30 days, as written on the bill). It applies to late (or too low) payments of both provisional and final tax bills, however, you don’t have to pay 4% p.a. on the difference between the provisional and the final bill.

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