The opportunity cost is not zero, though, is it?
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Of course not! But there is also zero risk that I cannot make my tax payments. Some have a hefty emergency fund in case something unexpected happens. I have a tax fund for the certain tax payments 
There is also no risk if you pay taxes monthly for the current tax year (instead of saving monthly a year in advance). If there is a sudden loss of income, there is no income tax to pay (unlike emergencies). And if you pay taxes in the current year, it should also be easier to estimate.
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I have a spreadsheet with my current liquidity and expected budget over the next 6 months, listing all my payments/income. That way I keep an eye on liquidity management and won’t be surprised by any tax invoices.
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Coming back to the original question: Looking at the current stock market prices, why shouldn’t I delay provisional tax payments for a cheap 0.25% rate? That’s like the best investment on margin I can imagine 
Of course, it’s also frowned-upon market-timing, I’m very well aware of that, it’s my weakness.
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Does anyone know how interest on tax payments works in Geneva?
I saw this table showing 3% for 2023 but I’m not sure how they apply that. e.g. would they apply it if you pay your monthly taxes as they computed and then pay the difference (e.g. 10k extra from a bonus awarded in Jan) when you file the taxes in 2024?
Also saw this page on L’intérêt moratoire but not sure if the “notification du bordereau” is within 30 days of the invoice from the tax office (post tax filing), or 30 days of receiving the payment. Confusing for me in French!
I actually do it this way.
IMO it isn’t market-timing, as I don’t sell any shares to pay the final tax bill, but I adjust the savings rates shortly before the due day, in order to have enough cash on hand.
As I’m expecting to get about 4-5% p.a. on average on that amount, I’d rather invest that money and pay a measly 0.25% p.a. for it.
Question:
As I recently received the provisional invoice for direct federal tax, I am wondering whether an extension of the tax return deadline would make sense. Since the (higher) definitive bill is only generated once I have sent off the tax return, it would thus be possible to “defer” the difference in tax.
Am I missing anything here?
Note that filing your taxes later does not always result in a later definitive bill, depending on who processes your taxes. However, your suggested approach can help.
The only drawback I can think of is that the value dates of your Verrechnungssteuer credit and foreign withholding tax credit are also moved back when filing your taxes late. At least that’s the case in ZH.
I noticed this year that filing taxes early February was to my disadvantage. I got a corrected provisional federal tax bill for 2022 in mid February, based on my tax declaration. Surprisingly, the corrected provisional tax bill (dated February 10) actually arrived before the original provisional tax bill (dated March 1 but arrived a few days earlier). So the tax bill dated February 10 states that it replaces the tax bill dated March 1 
Hi,
I received from my gemeinde tax office “Provisorische Rechnung (Zahlungseinladung)”, “provisional invoice (invitation to pay)”.
I found it a bit annoying the fact of multiple estimated payments. I would prefer to pay all at once.
I think this payments now are optional, and if you prefer they can be paid all at once when you will get your final tax bill. Then you have 30 days to pay all. Probably with an very small interest addition. Personally, when the tax is requested I could take the money from my personal budget for emergencies.
How do you use to handle this? do you pay with multiple payments ahead? or do you prefer to keep the money with you as long as possible and pay all taxes at once when they are requested?
Cheers
This question has been discussed already:
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I used to be paying the full amount as soon as possible.
With interest rates near zero or below, there wasn’t a point in delaying.
If I can get a higher interest rate somewhere else (at a bank or broker) than from the tax administration, I may reconsider.
In ZH it costs 0.25% p.a. to pay up to one year late. Even on my savings account I get more than what I pay there.
And IMO having that money invested and paying the tax bill by adjusting the savings rate shortly before the due date of the final bill, has a higher expected return than 0.25% p.a. 
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If you’re fortunate that your tax bill is low enough that you can simply adjust the savings rate shortly before the due date, sure.
That would not be possible for me, especially as my due dates for the final state tax bill and the provisional federal tax bill (which can’t be ignored) are only about a month apart. I certainly could tweak the timings of my investments to be slightly longer in the market in average. However, I don’t want to effectively leverage my portfolio. Especially as I’m self-employed, so my income is not as safe as it may be for others. That said, I currently transfer the tax owed monthly to a savings account as that pays more than 0.25% p.a.
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I don’t think this kind of optimization is worth my time. I’m going for automatic solutions. A back of the envelope calculation for my case yields 200-300 per year, after tax. I don’t think that translates in a good hourly rate.
A few suggestions:
- Divide the expected tax bill into payments into monthly rates. This is what I am doing. It’s super easy to budget and time saving.
- Do the above, but stop your automatic investment during the months prior to the tax bill until you have accumulated enough to pay for tax.
- If you have a 13th salary, use that to pay larger chunks.
- If you have a bonus that you can count on, use that to pay the entire expected bill. A friend of mine’s doing it this way. He gets his bonus in March and uses it to pay his tax bill which arrives at the same time. Peace of mind.
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Hi folks,
I recently got my C permit and no longer taxed at source.
With this, I got the additional responsibility of figuring out how to best utilize the additional resources that are temporarily available at my disposal.
I don’t want to end up in a situation where it’s stuck in a down-market when my taxes come due nor do I want it to just sit idly.
What’s the recommended way to handle this money?
Thanks!
Depending on the size of your assets and your savings rate, you could use margin loans.
I pay my taxes with margin loans and with the savings of 2-4 months I pay back the loan.
Can you detail how you do it?
What exactly do you want to know?
I have a portfolio at IB with a margin account. My CHF cash account is almost empty (everything is invested), I withdraw e.g. CHF 6’000 to my Swiss bank account and pay my taxes with it. Leaving me with a negative cash balance at IB, this is the margin loan. I then deposit e.g. CHF 2’000 every month from my savings rate and after 3 months my cash balance at IB is back to 0 and I have no margin loan anymore.
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Hi all,
I’ve just received my monthly invoices for 2023 - I’ve moved from B to C back in March.
I live in Geneva and I’m wondering if it is mandatory to pay this monthly “estimations” or if I can just put this monthly amounts on my Yuh account, get 0.75% interest on it, and in November just pay that last November invoice “estimate” with the expected annual amount?
Anyone has that experience?
For Geneva cantonal and communal tax, the answer is in the links in the post from @hippo above. In summary if you don’t pay within 30 days then 3% interest will accrue from day 31 onwards.
For Federal tax it is different. If I recall well payments on account during 2023 are optional and no interest is accrued if you don’t pay then. In Feb 2024 you should receive a provisional bill for 2023 Federal tax. That needs to be paid within x days otherwise interest accrues from day x+1 and the rate is 4%.