Despite its annually recurring nature, filling out the tax return is often an unpleasant chore with an unsatisfactory end result. Have I filled it out correctly? Have I submitted all the relevant documents? Could I have claimed more deductions? - These are only some of the questions people ask themselves when handing in their tax return. In the following article we will provide you with some tips and tricks to make the task of completing your tax return easier and less time consuming.
The aim of this article is to give you a general overview on the subject of tax returns. We will provide you with the information necessary to fill out your tax return such as the required documents, possible deductions, extending deadlines, cantonal differences and more.
1. Complete your tax return in three simple steps: a How-To Guide
Plan ahead to save time
In Switzerland, every taxpayer must fill out a tax return every year. Thanks to digitalisation, it is now possible to submit the tax return digitally, as well as by handwriting, or to make use of various specialised software.
In order to simplify the process of filling out your tax return, it is advisable to consider in advance which documents might be needed. The required documentation largely depends on your personal situation. If you have not had any tax-relevant changes in the past year, the easiest way to check whether or not you have all the necessary statements is to check your previous year's tax return.
You can find an overview of required documents on this page: Tax return enclosures.
2. Follow the enclosed instructions when completing your tax return
In principle, the process of completing your tax return is simple. You receive all the documents via postal mail, complete them and return them to the relevant tax authority. Together with your tax return, you receive a set of instructions to guide you through the process of completing the return. It is advisable to read through these before you start filling in your return to ensure that you are aware of any changes compared to the previous years. Furthermore, you should check if it is possible for you to hand in your tax return online. The availability of this option depends on your personal situation as well as on how technically advanced your home canton is.
Parts of a tax return
Your tax return (in a broader sense) includes a number of documents. These are:
Tax return guide
Enclosed in every tax return, you will find an instruction manual that guides you step by step through the process of completing your tax return.
Main tax return
The tax return (in a narrower sense) is the main document where all relevant final values of the other documents need to be entered at the end.
Securites register
All assets (accounts, shares, bonds, etc.) must be recorded in the securities register.
Qualified shares in private assets
Lists participations that are part of the private assets.
Qualified shares in business assets
Lists shares that are part of the business assets.
Real estate register
The real estate register is used to list all real estate properties.
List of debts
Lists all debts and the corresponding interest rates.
Professional expenses
This document lists all expenses that are deductible from taxes.
Insurance premiums
You can enter your paid insurance premiums in the insurance premiums document and transfer the resulting deduction to your tax return.
Job-related deducations and training costs
If you have undergone job-related training in the past tax period, the resulting costs are tax deductible.
List of illness/accident costs and disability-related costs
Costs incurred due to illness, accident or disability may be listed in this document and then transferred to the tax return.
We recommend that you fill in all the secondary forms first and only transfer everything to the main tax return document at the end. Note: Secondary forms are all documents other than the main tax return document.
3. Double-check all the information you have entered
Once you have successfully completed your tax return, it is advisable to take the time to double-check all the information. You should do this no matter which way you have filled in your tax return (by hand, digitally etc.).
A final check will save you lengthy discussions with the tax office, as they are obliged to clarify the provided information with you (even in the case of obvious errors such as a slip in the line).
We therefore recommend that you check the positions of the information provided in the tax return and reconcile the information yourself with your documents. In addition, do not forget to sign all the necessary documents.
4. Minimizing tax payments thanks to deductions
The Swiss tax systems allows you to make various deductions. Said deductions reduce the taxable income and thus the tax payment. It is therefore advisable to pay special attention to the permissible deductions. We have summarized an overview of the 10 most important deduction categories.
5. How to simply extend the deadline for handing in your tax return
You should make sure that you have enough time to fill in your tax return. If you will not be able to hand in your tax return on time, you can submit a so-called deadline extension. The purpose of this extension is to give taxpayers enough time to complete their tax return. An extension of the deadline does not involve any costs.
To apply for an extension of the deadline, you must contact the relevant tax authority. Depending on the canton, it varies whether this is handled centrally or whether each individual municipality is in charge of deadline extensions.
You can find more information on deadline extensions online on your canton's website. Please note that there is a deadline for handing in the deadline extension request as well. While it varies from canton to canton, most cantons required the deadline extension notice to be handed in by March 31.
It is advisable to apply for a deadline extension as early as possible. This will help you avoid unnecessary stress and give you more flexibility when completing your tax return.
6. Differences between cantons
The federal structure of Switzerland is reflected in the country's tax system. In addition to the taxes levied by the federal government, there are also taxes at cantonal and municipal level.
The responsibility is regulated as follows; the cantons have in principle the right to levy taxes on everything which is not exclusively regulated by the federal government while the municipalities are granted all tax levying rights by the canton.
This system leads to different tax rates being applied depending on a tax payers canton and municipality of residence.
We have compiled a fact sheet for the Canton of Zurich for you.
7. Differences in filling out the tax return between individuals and businesses
Important for companies
Switzerland is known as a low-tax country for businesses. In 2018, the national average was 17.4%, but with strong cantonal differences. The federal tax rate is currently 8.5%, but as this is calculated on profit after tax, the effective tax rate is 7.83%.
In addition, taxes are levied at cantonal and communal level. Taxes on profits at cantonal level amount to 4.4%-19%, at communal level to 4-16%. Capital tax at cantonal level is between 0.03%-0.3% and at communal level 0.04%-0.25%.
It therefore makes a substantial difference where exactly the company is located and is liable to tax.
Important for students
In princple, every person over the age of eigtheen is obliged to hand in a completed tax return. This rule applies to people with regular paying jobs as well as students who may not have any income or assets. Students are therefore required to fill in the minimum required information in the tax return and let the tax autority know of their student status. It is advisable to enclose a copy of the student ID as proof to avoid any uncertainties.
Are you a student yourself and do you have any further questions?
We deal with the topic of filling out tax returns for students in more detail in the linked article.
Important information for the self-employed
While employed people can hand in a salary statement (Lohnausweis) as prove of income, self-employed people usually do not have such a document, as their income is less regular.
Instead of the salary statement, self-employed people may hand in their business books and proof of their private assets as a basis to caluculate their tax liability.
Notice:
If you own a sole proprietorship or a partnership, the profits are treated as income.
If you own a PLC or LLC you are considered an employee for tax purposes. The corporation, however, is treated as a separate legal entity and is taxed independently.
Do you have any further questions? The specialists at taxea are happy to assist you with their comprehensive expertise.
