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Old 21.12.2015, 13:45
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Tax Return Question _ Savings Account Threshold

I had an interesting discussion with a colleague today and didn't know how to respond. Here is the situation.

His salary is a bit below 120 K, taxed at source. He is married, his wife doesn't work, 1 kid. He has no investment in Switzerland. No car. No property. No funds/stocks procured via Switzerland bank/broker. Just a savings account.

He invests in Hong Kong though on a yearly basis. He doesn't declare that when he completes his tax return as there is no ''policy'' which forces him to do so when he declares his tax return, since Switzerland authorities cannot really cross check if he owns a house of not in HK. He usually does the investment between Oct - Dec, some under his name, rest of it under his sister's/parent's name. He pays tax in HK on all the profit he earns in HK from the investment. He intends to go back to HK in about 10 years.

He has always been doing his tax return and always got something back (around 1000 CHF).

His investments are focussed in Q4 for the 2 reasons

a) FX rate during Q4 is usually preferable (this is his personal opinion, I might not necessarily agree this is true for all markets)

b) He believes that by having a lower amount in savings account by year end, will somehow assist him to get some money back from the government. This is something he isn't sure about and he asked me, but I don't think it matters how much savings you have unless you are very rich.

He is aware that the income tax slabs/slots are usually dependent on the salary you have. But he argues that tax return depends on the amount you have in your savings. His theory is, that If you earn 120 K, you receive 96K, you spend 36K and save 60 K then the tax return will be smaller than if you spend 76K (of which 40K is HK investment) and save 20K.

Does this theory have any credibility?

Side Note: I do not know how he survives on 36K a year
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Last edited by 3Wishes; 21.12.2015 at 16:13. Reason: removed a few potentially identifying details
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Old 21.12.2015, 14:02
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Re: Tax Return Question _ Savings Account Threshold

Bank account balance on 31 Dec does count towards your capital - which is taxed separately. So he does have a point.
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Old 21.12.2015, 14:02
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Re: Tax Return Question _ Savings Account Threshold

If he fills in a tax return he must (should) declare works wide assets & income. In zh you actually pay less tax by declaring 6 million than 250k but the difference is Small
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Old 21.12.2015, 14:23
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Re: Tax Return Question _ Savings Account Threshold

Right. But if the difference is less for 6 Million and 250 K, wouldn't it even be smaller/negligible for 20 K vs 70 K?


This year the FX isn't favourable, and hence he is contemplating to hold off his investment in HK until Q1 2016 but is unclear if he showing 60K in savings account will make him to be part of a different/higher capital slab and in turn reduce the return he gets.


My reply was, even though 20 K vs 70K seems a big difference with respect to savings for an individual, but it is still seems to be a small number for the Switzerland economy to make capital tax brackets at small intervals; example there wont be a a tax bracket for 0-20 K, then 20 - 40 K, 40k - 60k and so on. but rather 0 - 100 K or 0 - 200 K.


My opinion is just an uneducated guess.
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Old 21.12.2015, 15:48
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Re: Tax Return Question _ Savings Account Threshold

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Right. But if the difference is less for 6 Million and 250 K, wouldn't it even be smaller/negligible for 20 K vs 70 K?


This year the FX isn't favourable, and hence he is contemplating to hold off his investment in HK until Q1 2016 but is unclear if he showing 60K in savings account will make him to be part of a different/higher capital slab and in turn reduce the return he gets.


My reply was, even though 20 K vs 70K seems a big difference with respect to savings for an individual, but it is still seems to be a small number for the Switzerland economy to make capital tax brackets at small intervals; example there wont be a a tax bracket for 0-20 K, then 20 - 40 K, 40k - 60k and so on. but rather 0 - 100 K or 0 - 200 K.


My opinion is just an uneducated guess.
I don't think there is any wealth tax to pay with just 200k of assets in zh. Some cannot start about 85k, so you would need to check, in a any case the bill will be less than the cost of a pizza for 2.
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Old 21.12.2015, 16:02
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Re: Tax Return Question _ Savings Account Threshold

Thanks Fatmanfilms


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I don't think there is any wealth tax to pay with just 200k of assets in zh. Some cannot start about 85k, so you would need to check, in a any case the bill will be less than the cost of a pizza for 2.


Hi, Sva,


Any idea on how does the capital slot work and if there is any information available. Unable to find any so far, perhaps there is a specific german word which can point in the right direction.


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Bank account balance on 31 Dec does count towards your capital - which is taxed separately. So he does have a point.
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Old 23.12.2015, 22:33
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Re: Tax Return Question _ Savings Account Threshold

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Thanks Fatmanfilms






Hi, Sva,


Any idea on how does the capital slot work and if there is any information available. Unable to find any so far, perhaps there is a specific german word which can point in the right direction.

If only there were such a thing as like a worldwide web that one could search. The expression you're looking for is wealth tax or Vermoegenssteuer. I know in Basel Stadt it starts at 70k.
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