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Old 07.03.2015, 23:37
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Declaration of foreign real estate -- risk?

I entered Switzerland end of 2009. For the tax years 2009-2012, I filed "simplified declaration", as I was permit B and eligible to that.

For the tax year 2013, I filed a "complete" (non-simplified) declaration. I did not declare any foreign real estate or bank accounts then.

For this filing; the tax year 2014, I am considering to be "clean" and just declare all my properties, but would like to take the "risk" into account before doing so.

I assume that for the tax years 2009-2012, I won't be "haunted" as I was on simplified declaration (a la source, <120K) and could then not really declare foreign goods. Could they fine me and take back for the tax year of 2013? How much could they fine me if they would look back (and would they)? Wouldn't I have an excuse that I was still on Permit B (I just received my Permit C).

My foreign bank account is around 200K CHF; my foreign real estate... difficult to tell. Should I declare the original value (back when I bought it in 2006?), or do an updated estimate (the real value increased significantly)? If I would sell my foreign real estate, would the difference between what I declare now, and for how much I sell it be seen as gain, and be taxed? I.e., if I plan to sell it anyways one of the forthcoming years, do I have an interest of estimating it rather high to avoid property gain tax?
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Old 08.03.2015, 00:06
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Re: Declaration of foreign real estate -- risk?

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I entered Switzerland end of 2009. For the tax years 2009-2012, I filed "simplified declaration", as I was permit B and eligible to that.

For the tax year 2013, I filed a "complete" (non-simplified) declaration. I did not declare any foreign real estate or bank accounts then.

For this filing; the tax year 2014, I am considering to be "clean" and just declare all my properties, but would like to take the "risk" into account before doing so.

I assume that for the tax years 2009-2012, I won't be "haunted" as I was on simplified declaration (a la source, <120K) and could then not really declare foreign goods. Could they fine me and take back for the tax year of 2013? How much could they fine me if they would look back (and would they)? Wouldn't I have an excuse that I was still on Permit B (I just received my Permit C).

My foreign bank account is around 200K CHF; my foreign real estate... difficult to tell. Should I declare the original value (back when I bought it in 2006?), or do an updated estimate (the real value increased significantly)? If I would sell my foreign real estate, would the difference between what I declare now, and for how much I sell it be seen as gain, and be taxed? I.e., if I plan to sell it anyways one of the forthcoming years, do I have an interest of estimating it rather high to avoid property gain tax?
You should do an amendment for 2013, the tax owed will be tiny so no big deal.

Market value less 30% is a good starting point, any loans & interest is deductible so you may well end up getting a tax refund rather than a bill. There is no CGT on your foreign property in CH.
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Old 08.03.2015, 09:06
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Re: Declaration of foreign real estate -- risk?

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For this filing; the tax year 2014, I am considering to be "clean"
Good.

Depending on whether the taxation process for 2013 has been finalized or not, your situation is different:
- finalized: you committed tax fraud; you may be able to claim "tax amnesty"
- not finalized: immediately send a letter to the tax office, declaring your discovery fully

Regarding the extent of the tax amounts due - it does not matter. You are obliged to make a correct tax declaration.

Also watch out for the effect on your C permit (BGE 134 II 25) - unlikely, but some things are heavily interconnected.

Your best bet is to talk to a qualified tax advisor.
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Old 08.03.2015, 10:57
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Re: Declaration of foreign real estate -- risk?

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Good.

Depending on whether the taxation process for 2013 has been finalized or not, your situation is different:
- finalized: you committed tax fraud; you may be able to claim "tax amnesty"
- not finalized: immediately send a letter to the tax office, declaring your discovery fully

Regarding the extent of the tax amounts due - it does not matter. You are obliged to make a correct tax declaration.
Good advice. They ask for the year the property was purchased in, so when you declare they know that it should have been included on the tax declaration for the year prior.

My 2013 tax still isn't finalised as I had a difference in the bank accounts and they asked for more information. I had a fixed term deposit that ended, so the money wasn't in that account so I didn't declare it. They wanted a full explanation of where it went. A simple "I spent the money" was not enough
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Old 11.03.2015, 00:00
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Re: Declaration of foreign real estate -- risk?

Drats. I just received their letter with the finalization of the year 2013.
Better give them a call first thing tomorrow I guess...
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Old 15.03.2015, 12:35
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Re: Declaration of foreign real estate -- risk?

To whomever may be in a similar situation ever: a polite call does help. Even though the declaration of 2013 was already finalized & closed; they allowed me to update it without penalty.

Happy to be "clean" now.
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Old 18.03.2015, 10:54
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Re: Declaration of foreign real estate -- risk?

Hello 'belgian beer lover'


I am in similar situation and I am just curious of "what if". I have just moved to Swiss and I am on B earning less than 120K in Vaud.


What I hear everywhere is that in such situation you can do nothing and live happily here or if you are 'nerd' you can fill the simplified declaration. Well, but I paid once a huge fine, amount of my 2 years of savings, in my country just because I didn't know once I should declare something so... I went once to tax office here and they advised my to write it all again in a letter so they will most likely send me back a statement that I should be filling a full declaration.


Here is my question, did they asked you about the property tax from the years you were on B permit? When you declared it for 2013 then they saw when you bought it or otherwise acquired so they new.


Another thing is still not clear to me is what counts as your 'fortune' for tax reasons here in Swiss if you are on B permit. Until I not have C permit I do not consider Swiss any serious place to live so I do not want to move my 'welfare' here. The question is then what would happen when I get my C permit and I would like to transfer to Swiss my welfare - I don't know how much it will be then 100k - 300k... I guess they may ask for it as now they were in doubt whether I should be left on simplified declaration or moved to full declaration now. How much fine can I expect if that ever happen??
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Old 18.03.2015, 11:39
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Re: Declaration of foreign real estate -- risk?

I also own some foreign real estate.

It was not actually easy to get a reasonable valuation on one of these. I discussed this with the tax office and they said that in the absence of any hard figure I was allowed to guesstimate, and that as evidence they would accept a letter in which I explained the absence of hard data and the basis of my guesstimation. The first time round I wrote a long rant in which I made some extrapolations of comparable properties and attached a whole stack of photocopies and screenshots concerning said properties. That was accepted.

The year after I just wrote on a single sheet of paper something like "to the best of my knowledge the value is X" and referred to my letter of the previous year, and that was equally accepted without discussion.

The year after I just wrote "to the best of my knowledge the value is X" and did not refer to any previous documents and that was also equally accepted without discussion. I don't think they're looking to nitpick, and wealth tax is pretty low so there really is no reason to seek to be dishonest.
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Old 18.03.2015, 11:40
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Re: Declaration of foreign real estate -- risk?

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Hello 'belgian beer lover'


I am in similar situation and I am just curious of "what if". I have just moved to Swiss and I am on B earning less than 120K in Vaud.


What I hear everywhere is that in such situation you can do nothing and live happily here or if you are 'nerd' you can fill the simplified declaration. Well, but I paid once a huge fine, amount of my 2 years of savings, in my country just because I didn't know once I should declare something so... I went once to tax office here and they advised my to write it all again in a letter so they will most likely send me back a statement that I should be filling a full declaration.


Here is my question, did they asked you about the property tax from the years you were on B permit? When you declared it for 2013 then they saw when you bought it or otherwise acquired so they new.


Another thing is still not clear to me is what counts as your 'fortune' for tax reasons here in Swiss if you are on B permit. Until I not have C permit I do not consider Swiss any serious place to live so I do not want to move my 'welfare' here. The question is then what would happen when I get my C permit and I would like to transfer to Swiss my welfare - I don't know how much it will be then 100k - 300k... I guess they may ask for it as now they were in doubt whether I should be left on simplified declaration or moved to full declaration now. How much fine can I expect if that ever happen??
Unless your on a C permit or earning 120k or for some other reason are REQUIRED to make a tax return you have nothing to fear.
The wealth tax is peanuts on 300k, you have not made any false declarations so won't get any fines.
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Old 18.03.2015, 13:02
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Re: Declaration of foreign real estate -- risk?

Not to mention you might have to deal with Eigenmietwert on foreign real estates.....


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I entered Switzerland end of 2009. For the tax years 2009-2012, I filed "simplified declaration", as I was permit B and eligible to that.

For the tax year 2013, I filed a "complete" (non-simplified) declaration. I did not declare any foreign real estate or bank accounts then.

For this filing; the tax year 2014, I am considering to be "clean" and just declare all my properties, but would like to take the "risk" into account before doing so.

I assume that for the tax years 2009-2012, I won't be "haunted" as I was on simplified declaration (a la source, <120K) and could then not really declare foreign goods. Could they fine me and take back for the tax year of 2013? How much could they fine me if they would look back (and would they)? Wouldn't I have an excuse that I was still on Permit B (I just received my Permit C).

My foreign bank account is around 200K CHF; my foreign real estate... difficult to tell. Should I declare the original value (back when I bought it in 2006?), or do an updated estimate (the real value increased significantly)? If I would sell my foreign real estate, would the difference between what I declare now, and for how much I sell it be seen as gain, and be taxed? I.e., if I plan to sell it anyways one of the forthcoming years, do I have an interest of estimating it rather high to avoid property gain tax?
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Old 18.03.2015, 13:24
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Re: Declaration of foreign real estate -- risk?

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Not to mention you might have to deal with Eigenmietwert on foreign real estates.....

Isn't the Eigenmietwert just a percentage of the value?

So not that complicated really.
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Old 18.03.2015, 13:53
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Re: Declaration of foreign real estate -- risk?

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Isn't the Eigenmietwert just a percentage of the value?

So not that complicated really.
yes, but what % is it?
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Old 18.03.2015, 15:02
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Re: Declaration of foreign real estate -- risk?

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Isn't the Eigenmietwert just a percentage of the value?

So not that complicated really.
It is the imaginary rental income which you will profit if the property is rented out. This is roughly 4% of the value of the property. On a property of 500k it could reach 20k.
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Old 18.03.2015, 15:02
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yes, but what % is it?
I think that's something your tax office should be able to say.

I think the percentage varies depending on whether its an appartment or a house, or something like that. possibly there might be more categories. But nothing the tax office shouldn't be able to explain.
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Old 18.03.2015, 15:10
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Re: Declaration of foreign real estate -- risk?

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It is the imaginary rental income which you will profit if the property is rented out. This is roughly 4% of the value of the property. On a property of 500k it could reach 20k.
It's not really about hypotheical rent (although it is often explained that way), but more about the value you derive from using it.

It's all about people underdeclaring their income when part of their income is in direct benefits rather than money (this is called natural income). So for example if you own a farm and produce your own food, you still have income even if its not in the form of money on your bank account. To capture that income anyway, the concept of natural income was invented.
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Old 18.03.2015, 15:26
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Re: Declaration of foreign real estate -- risk?

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It's not really about hypotheical rent (although it is often explained that way), but more about the value you derive from using it.

It's all about people underdeclaring their income when part of their income is in direct benefits rather than money (this is called natural income). So for example if you own a farm and produce your own food, you still have income even if its not in the form of money on your bank account. To capture that income anyway, the concept of natural income was invented.
Agreed. But how can you measure it, in monetory terms, for a property which resides outside CH.
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Old 18.03.2015, 16:22
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Re: Declaration of foreign real estate -- risk?

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Agreed. But how can you measure it, in monetory terms, for a property which resides outside CH.
Do you mean, how would you measure it in the best of ideal worlds?

Or do you mean, how does the tax office actually want you to measure it?

For the latter case, there are actually rules.
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Old 19.03.2015, 01:51
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Re: Declaration of foreign real estate -- risk?

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It's all about people underdeclaring their income when part of their income is in direct benefits rather than money (this is called natural income). So for example if you own a farm and produce your own food, you still have income even if its not in the form of money on your bank account. To capture that income anyway, the concept of natural income was invented.

Well, that's really weird - if you own anything you should pay a tax based on the money you would spend to rent it. That philosophy means the same as communism which we all agree was bad. It directly try to adjust all people welfare to zero.


OK, in some way I could agree that it makes sense - it prevents the 'the winner takes all' situation, but then why cannot you deduce from your taxes excessive expenses you should not have. For example I am living 'temporarily' in a hotel for almost a year now, paying 2,7k a month for just a bed. Well that's no normal expense, then I should be given the right to deduce 2k *10 months because I would not exercise that amount of expense if the canton would provide me with such flat right?


Anyway, I am just learning now what and how can I deduce from tax. Could anyone point me to some step by step examples for a single?
i.e.
- how to deduce professional expenses (internet, phone, what else?)
- expensive meals taken during lunch break (is it possible?)
- insurance - LAMal ?
- other?


By the way, I was considering to inquiry with tax office about the property but in the end all the tax things made me so tired that I felt like I would even prefer to pay 300% (according to Wikipedia article) of the tax due in the future than hurry with it now - the online tax calculator estimated it to 80chf. However the Wikipedia may be wrong, it's just an article, not an official cantonal statement.
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Old 19.03.2015, 08:22
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Re: Declaration of foreign real estate -- risk?

When I had an accountant do my tax return, I failed to declare a house and a car because it simply didn't occur to me to tell my accountant about them. When it did occur to me a year or two later, it was all sorted out without any fuss or difficulty. Or additional tax.
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Old 19.03.2015, 10:49
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Re: Declaration of foreign real estate -- risk?

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Well, that's really weird - if you own anything you should pay a tax based on the money you would spend to rent it. That philosophy means the same as communism which we all agree was bad. It directly try to adjust all people welfare to zero.
Actually it's the complete opposite of communism.

You could say its a soirt of communist system that the state imposes a currency. If instead you chose to barter or trade in some other way without currency, that should be no reason to evade taxes. Hence the concept of natural income.

I was once explained it as follows:

Suppose you own a house, and rent it out to a tenant, and your tenant owns an identical house next door and rents it to you, you both have taxable income, right? Now you decide to save taxes by swapping houses - or even by not sawpping houses but agreeing that you can both live rent free. You haven't gained anything tangible and you haven't lost anything tangible, so it's injust that you should pay lower taxes over this accounting formality.

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Anyway, I am just learning now what and how can I deduce from tax. Could anyone point me to some step by step examples for a single?
i.e.
- how to deduce professional expenses (internet, phone, what else?)
- expensive meals taken during lunch break (is it possible?)
- insurance - LAMal ?
- other?
Use the online electronic assistant. It guides you through all these steps.

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I was considering to inquiry with tax office about the property but in the end all the tax things made me so tired that I felt like I would even prefer to pay 300% (according to Wikipedia article) of the tax due in the future than hurry with it now
Not a good idea.

Actually talking to the taxman would have cost you less sweat and blood and given you more tangible and actionable feedback than starting a thread on EF. Being tired is no valid reason to fill in your tax form incorrectly.
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