A question that few dare to ask

Imagine Marc, a senior executive in Lausanne, who discovers that he has paid thousands of francs too much in taxes simply because he was not informed about possible deductions.

This situation is more common than one might think.

In Switzerland, the complexity of the tax system can lead to costly mistakes for taxpayers.

Understanding the Swiss tax system

1. A three-tier structure

The Swiss tax system is structured in three tiers: federal, cantonal, and communal. Each level has its own rates and rules, which can make taxation complex and variable depending on the place of residence.

2. Withholding tax vs. ordinary taxation

Foreign residents without a C permit are generally subject to withholding tax, deducted directly from their salary. However, it is possible to request a Subsequent Ordinary Taxation (SOT) to benefit from specific deductions, such as contributions to the 3rd pillar or childcare expenses.

Often unknown tax deductions

1. Retirement savings and deductions

Contributions to the 3rd pillar A are deductible from taxable income, up to a certain limit. Additionally, buybacks in the 2nd pillar can also offer significant tax advantages.

2. Deductible professional expenses

Expenses related to the exercise of your profession, such as travel, meals, or continuing education, can be deducted from your taxable income. Similarly, childcare expenses and mortgage interest are often deductible.

Common mistakes to avoid

1. Not checking your tax assessment

It is essential to carefully check your tax assessment to ensure that no mistakes have been made. Omissions or errors can lead to overpayment of taxes.

2. Ignoring changes in situation

A change in personal circumstances, such as marriage, the birth of a child, or a move, can have a significant impact on your taxation. It is important to report these changes to the tax authorities to benefit from appropriate adjustments.

Conclusion

Swiss taxation, although complex, offers many optimization opportunities for those who take the time to inform themselves. By being proactive and consulting experts if necessary, you can ensure that you only pay the taxes you actually owe.