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Old 17.12.2012, 12:31
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Should I empty my bank account to avoid tax ?

If I understand correctly, for my 2012 tax return I have to show the balance of my bank account(s) on Dec 31st

This is pretty annoying because the money that has gone in there will be taxed as income.

So.. what's best way to deal with this ?

Should I withdraw all my money on Dec 30th then put it all back in on Jan 2nd ?
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Old 17.12.2012, 12:36
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Re: Should I empty my bank account to avoid tax ?

You can try.
You know wealth tax is practically zero?
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Old 17.12.2012, 12:42
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Re: Should I empty my bank account to avoid tax ?

You do realise that you also have to declare any cash you have, don't you?

Tom
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Old 17.12.2012, 12:43
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Re: Should I empty my bank account to avoid tax ?

I think it is .8%, so less than one percent, and kicks in over $100k.
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Old 17.12.2012, 12:50
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Re: Should I empty my bank account to avoid tax ?

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If I understand correctly, for my 2012 tax return I have to show the balance of my bank account(s) on Dec 31st

This is pretty annoying because the money that has gone in there will be taxed as income.
No it won't. Not unless it actually was income, in which case you'll need to declare it as such regardless of bank balances.

And as others have said holding the money in cash doesn't make any difference to your actual liability, although clearly if it's a very large amount and you want to illegally hide it away under your mattress then that's your choice

Bottom line is that, regardless of the amount, you'd be better leaving in an interest-paying account than withdrawing it to evade the small tax due on it.
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Old 17.12.2012, 13:00
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Re: Should I empty my bank account to avoid tax ?

its only over 70K isnt it?
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Old 17.12.2012, 13:33
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Re: Should I empty my bank account to avoid tax ?

To be clear, you are taxed on income and wealth at different rates. Cash in your bank account and any other wealth (properties etc) that you have are taxed at the wealth tax rate, which is typically tiny. For example in Geneva, the Cantonal and Communal wealth tax would be 0.39% on a wealth of 1.68M CHF (ie 6,600 CHF). More details for Geneva here:

http://ge.ch/impots/calcul-et-paiement-des-impots

You can look up the calculation for your own Canton on their tax website.
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Old 17.12.2012, 13:47
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Re: Should I empty my bank account to avoid tax ?

I can't remember the details now but I think on my (Basel Stadt) tax form I had to note down any bank account which gave me more than 200 CHF in interest. With such low interest rates, that's quite a chunk of cash, but even so I simply opened a few (online) Postfinance savings accounts and spread my savings between them all.
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Old 17.12.2012, 15:43
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Re: Should I empty my bank account to avoid tax ?

I knew it was a small tax charge.. hadn't realised it was such a small %

But.. it's still a double tax for most current accounts where the only credit comes from a salary.
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Old 17.12.2012, 15:52
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Re: Should I empty my bank account to avoid tax ?

Actually... I've now got a bee in my bonnet

I'm in BL so wealth tax is 1.15% on 'wealth' from 10k then it creeps up.

(just to prove I've done a bit of research)
http://www.baselland.ch/fileadmin/ba...oegen_2012.pdf


But does anybody know what constitutes an "item of wealth" that has to be declared ?

If I convert my cash (and there's not that much of it.. I'm just curious) into a few gold coins.. do I have to declare them ? What if I buy an expensive Poodle ?
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Old 17.12.2012, 15:57
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Re: Should I empty my bank account to avoid tax ?

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Actually... I've now got a bee in my bonnet

I'm in BL so wealth tax is 1.15% on 'wealth' from 10k then it creeps up.

(just to prove I've done a bit of research)
http://www.baselland.ch/fileadmin/ba...oegen_2012.pdf


But does anybody know what constitutes an "item of wealth" that has to be declared ?

If I convert my cash (and there's not that much of it.. I'm just curious) into a few gold coins.. do I have to declare them ? What if I buy an expensive Poodle ?
Note that it's 1.15 per mil, or .115% - so in that example, they show that a wealth of 100,000 CHF pays 160 CHF in tax.

For the second part, my accountant asks for:
The December 31st value of all of your assets worldwide such as:
a. cash
b. securities and other financial accounts
c. property (cars, boats, art, jewelry, precious metals and collectibles, etc)
d. loans you have made to others
e. annuities or life insurance policies with a surrender value.

and noted to me that retirement-type accounts are not included in the wealth calculation (I'm in Zurich)

Last edited by anowheels; 17.12.2012 at 15:59. Reason: second part
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Old 17.12.2012, 15:57
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Re: Should I empty my bank account to avoid tax ?

Any interest you receive on your savings will be taxed at about 33% and paid by the bank to the tax authority.

You should receive a bank statement in January 2013 showing interest and tax paid for you in 2012. You can re-claim this 2012 tax back on your next tax return, which you make in Febraury 2013.

The system is designed to tax black money held in Swiss accounts by foreigners living outside Switzerland.
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Old 17.12.2012, 16:00
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Re: Should I empty my bank account to avoid tax ?

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But does anybody know what constitutes an "item of wealth" that has to be declared ?
Bank accounts
Cash
House
Objects in house
Vehicles
Items in safe-deposit box
Etc.

Tom
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Old 17.12.2012, 16:01
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Re: Should I empty my bank account to avoid tax ?

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If I understand correctly, for my 2012 tax return I have to show the balance of my bank account(s) on Dec 31st

This is pretty annoying because the money that has gone in there will be taxed as income.

So.. what's best way to deal with this ?

Should I withdraw all my money on Dec 30th then put it all back in on Jan 2nd ?
if you quit your job, you would have no income and hence no income tax too
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Old 17.12.2012, 16:04
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Re: Should I empty my bank account to avoid tax ?

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Bank accounts
Cash
House
Objects in house
Vehicles
Items in safe-deposit box
Etc.

Tom

Only a fool would declare those... oh yes i have 2 KG of gold in my deposit box and dodgy cash in my pillow case.
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Old 17.12.2012, 16:05
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Re: Should I empty my bank account to avoid tax ?

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If I understand correctly, for my 2012 tax return I have to show the balance of my bank account(s) on Dec 31st

This is pretty annoying because the money that has gone in there will be taxed as income.

So.. what's best way to deal with this ?

Should I withdraw all my money on Dec 30th then put it all back in on Jan 2nd ?
if you withdraw it, it will still be in cash which still counts as wealth. how would you answer the question "sir, i see you withdrew 250'000 CHF from your bank account on 23 December. What did you do with this cash?"

to make this effective, you should transfer it to somebody else who will then take the tax hit. i'd be happy to perform this service for you. just let me know...
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Old 17.12.2012, 16:06
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Re: Should I empty my bank account to avoid tax ?

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Only a fool would declare those... oh yes i have 2 KG of gold in my deposit box and dodgy cash in my pillow case.
Fool or not, that's the law.

Of course, not declaring them is only tax-evasion, which isn't a crime here.

Tom
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Old 17.12.2012, 16:07
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Re: Should I empty my bank account to avoid tax ?

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Fool or not, that's the law.

Of course, not declaring them is only tax-evasion, which isn't a crime here.

Tom

or tax avoidance ?
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Old 17.12.2012, 16:12
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Re: Should I empty my bank account to avoid tax ?

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Any interest you receive on your savings will be taxed at about 33% and paid by the bank to the tax authority.

You should receive a bank statement in January 2013 showing interest and tax paid for you in 2012. You can re-claim this 2012 tax back on your next tax return, which you make in Febraury 2013.

The system is designed to tax black money held in Swiss accounts by foreigners living outside Switzerland.
Yes, the bank takes more interest off bank accounts and pays it over.

However, this is where the "bank secrecy" (so I`m told by my esteemed Swiss friends) comes into the story........ You can be happy to have this deducted and not declare your bank statement, or you can willingly declare your bank balance and claim back a portion of the interest.

What I don`t know is whether ones name is attached to the interest the bank pays on your behalf? Or is that also secret/anonymous, just a portion of the monies held by the bank? Must be anonymous hey?... otherwise where`s the "secrecy"?
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Old 17.12.2012, 16:27
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Re: Should I empty my bank account to avoid tax ?

Ah.. see.. there it is..

My accountant has only every asked for the 'end of year' statements on obvious things (bank accounts, mortgage, interest payments etc.)

I never knew these other things ... cash, bullion, watches, expensive Poodle etc.... are also taxable assets. (The accountant has been to my hovel.. so he presumably knows not to waste our time)

Still it's a bit of a laugh.. there can't be a list of what has to be declared can there ? (or is there a stipulation "anything worth more than XXXX chfs")
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