In Switzerland, persons taxed at source are not required to file a tax return. However, there are exceptions which may vary from canton to canton. Some people who are taxed at source still have to file a tax return despite being taxed at source. This is called a subsequent ordinary taxation.
What is an ordinary subsequent taxation?
Foreign nationals who do not have a C permit are in principle taxed at source. This means that taxes are deducted directly from their salary - so they do not have to file a tax return.
However, people who are taxed at source still have to file an ordinary tax return.
Who is subject to subsequent ordinary taxation?
Since the withholding tax reform of 2021, a distinction is made between compulsory ordinary taxation and subsequent voluntary ordinary taxation.
If a taxable person has a gross annual income of CHF 120,000+ or other income or assets not subject to withholding tax (pay attention to cantonal differences), he or she is subject to compulsory taxation. With the reform, it is now also possible to file a tax return voluntarily.
But why exactly? Many taxpayers benefit financially by filing a tax return. Business expenses, sickness expenses and third pillar payments can be deducted from the tax return - which may result in a partial refund of the tax debt.
It is important to note, however, that taxpayers who have been entered in the ordinary register once are required to file a tax return every year.
Applying for subsequent ordinary taxation
In order to be entitled to subsequent ordinary taxation, an application must be filed with the cantonal tax administration of the canton of residence before 31 March of the following year. Generally, it is possible to apply online.
If a person subject to withholding tax has an income or wealth that exceeds the given limits and does not report this to the tax authorities, there may be criminal tax consequences.
