Hi,
do you know if the 2nd Pillar yearly bonus is taxed as capital income ?
I recently got the bureau’s taxation decision and they are accounting for an extra amount of capital income that I don’t know where it’s coming from, so I was wondering if they took in account the 2nd pillar bonus. I will talk to them on Monday, but I wanted to ask the community.
Thanks
Google is faster than asking on this forum but I’ll answer anyway 
If you see an unexplained “capital income” item on your tax return, it should not be from your annual Pillar 2, as these are not taxed as capital income while they are still in the pension fund. The only exception would be if you actually withdrew money from your 2nd Pillar during the tax year, in which case the withdrawal would be taxed as a separate lump-sum payment (at a special rate) and not as regular capital income.
Thanks for answering, and yes I understood so from searching as well. I have not withdrew money so it’s really not clear where they got the amount from.. they accounted for more than double the amount. I could understand a small adjustement, if I missed something, but more than double seems totally off.. I will keep you posted.
I imported the eTax document from Saxo and the tax program from the canton of Zurich asked whether I want to leave it as is or whether I would like to reconcile the positions with ICTax. The dividend income was increased during the reconciliation, this was apparently missing in the eTax document or the document was not up to date.
Otherwise: Simply ask the tax authorities. So far, they have always given me super friendly information (which can of course vary from municipality, canton, person, etc.)
I had to fill it in manually as I’m on IBKR, and I also filled in the DA1 Form. Maybe.. maybe they reconciled against ICTax, taking in account positions and dividends for the full year..
I attached the IBKR statements, as I DCA on funds the income of course is not for a full year position.
I have to talk to them unfortunately..
Are you investing in accumulating funds? The accumulated dividends of those funds will not be visible on the IBKR activity statement and the data may become available in ICTax only after filing the tax declaration. In such cases, the tax authorities will correct the incomplete entries.
No, they are all distributing ETFs. My best guess for now is that the tax-man took in account the positions as if they were held for the full year.
Did you get a listing of elements that build your tax declaration (i.e. income, all types of deductions, etc)? You can go through it position by position and compare with what you submitted.
I was also confused by this. Do you imply things like “dividend and interest” as opposed to “earned income”?
Oh, a very common problem is that if you are not eligible to tax credit for US WHT, they remove the deduction, but keep gross dividend as income.
The tax office only provides the decision, but little or no explanation of why they made the correction.
Yes, I meant “divident and interest” type of income, not the earned income itself. I’m an employee so the earned income is clear from the salary certificate, while I had to make the math for the capital income.
I should be eligibile for the US WHT tax credit, why shouldn’t I be ? In any case, that would be just a few hundreds, while they literally more than doubled the capital income declared amount which is in the order of thousands.
Sounds like an oversight/processing/technical error to me.
Remember that the time for an objection is limited. I think it’s 30 days (at least in the canton of Zurich, but I’m not sure). It’s written on the decision.
Yes indeed, 30 days, I just got it last Thursday
In which canton do you live?
When the taxation differs from the tax return filled, the tax authorities usually explain the delta in a sentence.
If not, I would recommend giving them a call to understand the difference and appeal if not correct.
It is Ticino, the sentence is just “* Correction based on the information available to the tax bureau” saying nothing more. I will call them tomorrow morning and also send a formal letter of appeal. The overall difference in actual taxation is just few hundreds, but it’s a matter of principle.
Spoke to them today, as suspected they took in account the positions as if they were held for the full year, and making the math in ICTax. I told them to review the IBKR statements and the DA-1 form. They are about to send me the amended version, my filing was correct.