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Old 07.03.2015, 14:00
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Tax return for incorrect tax band, taxed at source, 2014 - is it possible (in Vaud)?

Hello, I have tried to find the answer but none of existing posts seem to mention the situation.


I have worked for 6 months in 2014 under a contract for 120k annually. I have received a 2014 salary certificate from my employer so I started to wonder what can I do with it


I discovered that I was paying monthly taxes according to 120k yearly income - 17,9% of gross salary but in fact my gross income for 2014 was 60k so I guess that I should have paid lower tax according to:
http://www.vd.ch/themes/etat-droit-f...-impot-source/


I know that I may submit the simplified declaration to deduce additional things from the tax but I have no idea if it can be used for re-evaluating the tax band.


There is an instruction published for the simplified declaration which does not help me:
http://www.vd.ch/themes/etat-droit-f...ot-simplifiee/


Can you advise me if I am correct with the tax band assumption? How to calculate the total tax band anyway? I have a vague idea that the 17.9% consist of state, cantonal and commune taxes - are these the I, J, K from the tax bands table mentioned by the link above?


Anyway, is the 31st of Mach the deadline for filling in such forms or 15th of March?


Thank you in advance
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Old 07.03.2015, 14:29
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Re: Tax return for incorrect tax band, taxed at source, 2014 - is it possible (in Vau

The employer can take advice from their accountant to change the tax-at-source but once it's paid and declared, you can sort it out at the tax office end.

I would suggest going to your local 'Steueramt' (tax office) at your (Gemeinde) Town Hall and asking them to assist you with your enquiry. In Zurich, the tax return documentation is now all available (printed) in English, although personally I prefer to do it with an agent.

Either way, it has to be handled properly, and the tax office should be able to sort it out pretty easily - were you unemployed for the other 6 months with zero income, but still resident in Switzerland ?
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Old 07.03.2015, 15:13
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Re: Tax return for incorrect tax band, taxed at source, 2014 - is it possible (in Vau

The tax rate is actually calculated on the 'extrapolated' annual income, i.e., if you lived in CH and worked for 6 months receiving 10K a month, your annual tax rate would be determined based on 12 months at 10K => 120K. Therefore the withholding tax should be reasonably correct (unless you live in a town with much lower taxes than the canton average).
Only in case you have been in CH for the full year (or at least a longer period), the calculation of the basis for determination of the tax rate would be different.
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Old 07.03.2015, 19:12
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Re: Tax return for incorrect tax band, taxed at source, 2014 - is it possible (in Vau

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The tax rate is actually calculated on the 'extrapolated' annual income, i.e., if you lived in CH and worked for 6 months receiving 10K a month, your annual tax rate would be determined based on 12 months at 10K => 120K.
The tax rate for calculating the withholding tax is calculated as if that income was the income for the year.

But the tax due for the fiscal year is determined based on the effective income of that fiscal year.

It is now time to talk to the tax office to determine the best way to perform a proper tax declaration so that the current imbalance is adjusted.
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Old 07.03.2015, 19:20
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Re: Tax return for incorrect tax band, taxed at source, 2014 - is it possible (in Vau

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The tax rate is actually calculated on the 'extrapolated' annual income, i.e., if you lived in CH and worked for 6 months receiving 10K a month, your annual tax rate would be determined based on 12 months at 10K => 120K. Therefore the withholding tax should be reasonably correct (unless you live in a town with much lower taxes than the canton average).
Only in case you have been in CH for the full year (or at least a longer period), the calculation of the basis for determination of the tax rate would be different.
Meaning the OP has had the correct rate deducted no need to adjust, just to submit a return for the year in concern
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Old 07.03.2015, 20:30
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Re: Tax return for incorrect tax band, taxed at source, 2014 - is it possible (in Vau

Exactly - the rate would be reasonably correct ... and therefore the tax deduction was also fairly correct. Only gap could be difference between the canton average rate (across all commune) and the commune tax rate => final tax bill could be higher or lower
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Old 08.03.2015, 01:34
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Re: Tax return for incorrect tax band, taxed at source, 2014 - is it possible (in Vau

I had the same problem in Kanton Luzern. I contacted the Steueramt here in Luzern and they advised me to write a free-form letter explaining the situation. This is in addition to claiming tax back because of deductions such as daycare (for which there is a specific form).
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Old 08.03.2015, 14:37
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Re: Tax return for incorrect tax band, taxed at source, 2014 - is it possible (in Vau

I moved to Swiss for a job in the middle of the year so I have been and worked here for 6 moths last year.


In my home country the annual tax is calculated exactly like daffy99 pointed out, the employer deduce the tax at source based on annual income but then if you did not gain full 12 moths income your tax band is adjusted to the real annual income in the tax declaration form - meaning tax return. Well, but it differs from country to country so... In the 'declaration simplifiee' form I can see only a field to state my gross annual income and annual tax payed but no fields for tax band - maybe here in Swiss they calculate the tax band themselves based on this declaration or maybe they don't care and will not give you anything back.


In general I would not care if it's just a few hundreds but looking at the tax band table is teems that the difference between 120k and 60k could be ~40% which means a few k tax return in my case.


Thank you all for some light on that matter. I am still confused but I got hope so I will try to talk to the tax office. It's a chanlenge because I don't speak French at all.
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Old 08.03.2015, 15:03
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Re: Tax return for incorrect tax band, taxed at source, 2014 - is it possible (in Vau

Its quite simple you are already on the correct band if you work 12 months which is what the band is assuming. For last year you submit a return request since you only worked 6 months. If you keep working you are actually on 120k and your band assumes that.

Simple
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Old 08.03.2015, 19:02
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Re: Tax return for incorrect tax band, taxed at source, 2014 - is it possible (in Vau

Yes, I meant only the last year situation, 2014. For this year onwards, until my situation change again, the tax deduction at source will be just exact.
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Old 09.03.2015, 11:22
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Re: Tax return for incorrect tax band, taxed at source, 2014 - is it possible (in Vau

In Vaud it's simple:
You were a la source:

1) Do nothing. The "a la source" thing will be accepted and valid*.
*Although, I heard if mistakes were made, Income Tax office can still request modifications

2) Do the "declaration simplifiee" which is to make changes and all that.
Inside, you'll declare what you already paid "a la source", which will be deducted from the tax "you should pay" according to what you'll put.

Erm, so: in declaration simplifie paper, you'll put 60K income, some deductions, some forfait for whatever.... You'll get a total income after deductions. Say it's 55k.
Then you use a tax calculator to see how much that would be, ex:
http://www.vd.ch/themes/etat-droit-f...ette_resultats

Say the total (commune + federal) is 9k.

Then you deduce 9k from your "total already paid" (ex: say you paid 13K, a la source). It means the tax office owe you 4K.

Note: they take ages to process all that, it can be year(s) after you submit the form.

Note 2 : the a la source thing already contains average deductions, and average taxation on a virtual commune. So don't expect that "a la source" vs "simplifie" will be the same result.
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Old 09.03.2015, 23:05
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Re: Tax return for incorrect tax band, taxed at source, 2014 - is it possible (in Vau

Thank you very much for the calculator, I was looking for it everywhere!


Well, but now I am even more confused


Should I put the same income to 'Revenue imposable ICC' and 'Revenue imposable IFD' ? Because if I put in both fields 60K than the total tax is very close to what I actually paid at source, the difference is <1k.


I found some definition of 'Revenue imposable':
https://fr.comparis.ch/steuern/steue...einkommen.aspx


Well quite confusing as well. Looking at my pay slips they calculated the tax at source based on my brut monthly income, where according to the definition it should be calculated after subtracting expenses for social things.


Nonetheless, now comes the fun part:


1. Simulation of next year appears to be in my favor
21k tax at source vs 26k tax from the tool


2. Welfare tax. When I state, let say 200k Swiss located than it yields ~500 tax but if I state 10k Swiss located and 190k foreign than it yields ~50 tax. That's weird. Is it better to keep money abroad?


Anyway, I got really shocked when I read that probably I should declare all my money I have abroad and properties as well Not that I am so rich, the estimated tax of that would be <100chf according to the tool but it would be a horrible paperwork!


Damn, right now I am considering to keep quiet and if anywhere in the future they will ask me for correction than I will hire some tax advisor or flee from Swiss Ok, but seriously is it really possible that the tax at source may be lower than what it should be? For this year they are still stating 17.9% tax band on my pay slips. I rather think that I put the wrong data to the tool somehow...
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Old 09.03.2015, 23:57
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Re: Tax return for incorrect tax band, taxed at source, 2014 - is it possible (in Vau

Well, I found some answers. According to this Ernst&Young presentation from 2012
https://www2.eycom.ch/publications/i...6_tax_vaud.pdf


It is indeed that crazy! Look at the tables:


1. Full tax


Revenu imposable | ICC | IFD | Impôt total | Taux global
__________________________________________________ ______
50000 |8090.80 | 444.95 | 8535.75 | 17.07%
75000 |13946.95| 1244.50| 15191.45| 20.26%
100000|20695.10| 2874.00| 23569.10| 23.57%
125000|27969.80| 4994.80| 32964.60| 26.37%


2. Tax at source


Revenu (annuel brut)| tax
________________________________
50000 | 4060
75000 | 10088
100000| 15920
125000| 22938




So yes, now I know that the 'revenu imposable' for IFD is the same as for ICC but I also know that tax at source is much lower than full tax. Wow, that's interesting.


Still it means that probably I was right about the amount I should pay for 2014. Probably, because it depends on what calculation method will they apply if I submit the 'simplified tax return form'.
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Old 10.03.2015, 07:57
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Re: Tax return for incorrect tax band, taxed at source, 2014 - is it possible (in Vau

The calculations are different for each type of tax.
For tax at source, the amount of tax is calculated based on the gross salary and the calculation takes into consideration all standard deductions. As stated before, it is also based on the average tax rate in the canton.

If you file the tax return, the basis is the net salary (i.e., after deductions of social security (AHV/IV/Unemployment Insurance) and pension fund contributions. After that, the usual deductions are applied (depending on canton/commune). Also, the deductions are different for the cantonal tax and for federal tax, that's why there are the two amounts for ICC and IFD. For me, the difference in the two incomes is about 18K due to different deductions, income for Federal tax being higher.

For the tax return, the actual tax rate is calculated on the basis of the annualized income - i.e., if you only spent in CH 6 months and earned 60K, your tax rate would be determined based on 120K annual income => the tax at source deductions are correct.
If you were in CH the whole year but only earned income over 6 months, then your taxes would be recalculated, because the annualized income would be 60K.
If I remember correctly, on the form you need to enter the date that your tax obligations in CH began.
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Old 10.03.2015, 08:09
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Re: Tax return for incorrect tax band, taxed at source, 2014 - is it possible (in Vau

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Well, I found some answers. According to this Ernst&Young presentation from 2012
https://www2.eycom.ch/publications/i...6_tax_vaud.pdf


It is indeed that crazy! Look at the tables:


1. Full tax


Revenu imposable | ICC | IFD | Impôt total | Taux global
__________________________________________________ ______
50000 |8090.80 | 444.95 | 8535.75 | 17.07%
75000 |13946.95| 1244.50| 15191.45| 20.26%
100000|20695.10| 2874.00| 23569.10| 23.57%
125000|27969.80| 4994.80| 32964.60| 26.37%


2. Tax at source


Revenu (annuel brut)| tax
________________________________
50000 | 4060
75000 | 10088
100000| 15920
125000| 22938




So yes, now I know that the 'revenu imposable' for IFD is the same as for ICC but I also know that tax at source is much lower than full tax. Wow, that's interesting.


Still it means that probably I was right about the amount I should pay for 2014. Probably, because it depends on what calculation method will they apply if I submit the 'simplified tax return form'.
You are comparing apples and oranges.

125 brut is around 100 net (revenu imposable).

So, about CHF 600 difference.

Tom
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Old 10.03.2015, 18:57
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Re: Tax return for incorrect tax band, taxed at source, 2014 - is it possible (in Vau

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For the tax return, the actual tax rate is calculated on the basis of the annualized income - i.e., if you only spent in CH 6 months and earned 60K, your tax rate would be determined based on 120K annual income => the tax at source deductions are correct.
If you were in CH the whole year but only earned income over 6 months, then your taxes would be recalculated, because the annualized income would be 60K.
If I remember correctly, on the form you need to enter the date that your tax obligations in CH began.


That's what I heard today from the tax administration. Well, quite simple approach although not explained in any documentation.


Another thing I have learned is that I have to be prepared to do the full tax form next year. For single person if you have more than 56k money/welfare you have to switch to full tax. Funny thing is that you have to write to the tax office division 'impot a la source' that you have more than 56k and they will move you to the other tax office.


Question answered Thanks anyway!
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