Tax Return in Switzerland with a B Permit
Key Considerations
For individuals with a B permit, filing a tax return can be challenging, especially when tax obligations are not clearly defined. As an employee, you are subject to withholding tax, but there are situations where filing a tax return is mandatory or financially beneficial. Understanding cantonal regulations and deadlines in advance can help maximize potential tax savings. Back to the blog article B-Permit on Smart eTax.
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When Do You Have to File a Tax Return?
A tax return is mandatory for B permit holders in the following cases:
- Annual gross income over CHF 120,000: Those earning above this threshold must file a standard tax return.
- Additional income or assets above a certain threshold: In some cantons (e.g., Zurich), a tax return is required for additional income above CHF 3,000 or assets exceeding CHF 80,000 (single) or CHF 160,000 (married).
- Self-employment: Anyone working as a self-employed individual must submit a full tax return.
- Income from foreign sources: Foreign income must be declared.
When Is a Voluntary Tax Return Beneficial?
Even if a tax return is not mandatory, filing one voluntarily can be financially advantageous. Reasons include:
- Deducting work-related and education expenses: High commuting costs or training expenses can be declared to lower taxable income.
- Refund of overpaid withholding tax: If too much tax has been deducted, a refund can be requested.
- Claiming deductions: Contributions to the second pillar (pension fund) and third pillar (private pension savings) can reduce tax liability.
Do I Need to Inform the Cantonal Tax Office?
Yes, in certain cases, reporting is required:
- If your financial situation changes significantly (e.g., inheritance, asset growth, or new income sources), reporting is advisable.
- If uncertain, you can contact the cantonal tax office to clarify whether a tax return is required.
- If you exceed the ordinary tax obligation (e.g., earning over CHF 120,000), the tax office usually notifies you automatically. However, responsibility lies with you.
How Does the Tax Return Filing Process Work?
- Tax Year and Retroactive Declaration
The tax return is filed retroactively for the previous tax year. For example, the 2023 tax return is generally due in the first quarter of 2024.
2. Meeting Deadlines or Requesting Extensions
- Deadlines vary by canton but typically fall between March and May of the following year.
- If more time is needed, an extension can be requested.
3. Completing and Submitting the Tax Return
- The tax return can be submitted online or on paper.
- Important documents such as salary statements, bank statements, insurance premiums, and rental costs should be included.
4. Reviewing the Tax Assessment
- Months after submission, a tax assessment is issued, detailing the calculated tax liability.
- This should be carefully reviewed as errors can occur.
- If the calculation appears incorrect, an objection can be filed within a specified timeframe.
5. Settling the Final Tax Bill
- Overpayments result in a refund.
- After the final assessment, taxes must be paid in one or several installments.
What About Withholding Tax?
Many B permit holders are subject to withholding tax, deducted directly by their employer. However, in certain cases, filing a tax return can still be beneficial. For a detailed explanation of withholding tax, check our separate article.