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Old 17.10.2017, 15:36
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Partial year - Taxation and Pillar 3a

I ask these questions in the context of a foreigner's first and last year in Switzerland, where they don't arrive in January and don't leave in December...

Without considering any income outside of Switzerland, for a foreigner who lives and earns an income in Switzerland for part of a year, which of these two situations is correct:
1) foreigner pays income tax according to total income for the year
2) foreigner pays income tax on annualised income (e.g., for a worker earning four months salary here, tax calculated based on 3x the earnings)

Reduction of effective taxable income is possible by contributing to a Pillar 3a account. Which is correct for someone living here for part of a year:
1) can contribute up to CHF 6768
2) can contribute up to a percentage of CHF 6768, based on how many month were spent in Switzerland (e.g., for someone living four months in Switzerland, CHF 6767/3 = CHF 2256)

Thanks in advance for clarification.
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Old 17.10.2017, 15:40
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Re: Partial year - Taxation and Pillar 3a

You can put in the whole Pillar 3a amount (CHF 6768) and offset all of it.

Simply, your income is pro-rata'd: so are your deductions.
Otherwise the basis for each is wrong
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Old 17.10.2017, 16:57
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Re: Partial year - Taxation and Pillar 3a

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I ask these questions in the context of a foreigner's first and last year in Switzerland, where they don't arrive in January and don't leave in December...

Without considering any income outside of Switzerland, for a foreigner who lives and earns an income in Switzerland for part of a year, which of these two situations is correct:
1) foreigner pays income tax according to total income for the year
2) foreigner pays income tax on annualised income (e.g., for a worker earning four months salary here, tax calculated based on 3x the earnings)

Reduction of effective taxable income is possible by contributing to a Pillar 3a account. Which is correct for someone living here for part of a year:
1) can contribute up to CHF 6768
2) can contribute up to a percentage of CHF 6768, based on how many month were spent in Switzerland (e.g., for someone living four months in Switzerland, CHF 6767/3 = CHF 2256)

Thanks in advance for clarification.
Assuming you are going to be filing a tax return, this is my understand but I could be wrong:
  • your income is your income;
  • certain deductions are pro-rated e.g. Pillar 3a and certain expenses such as interest costs are on paid basis; and
  • your salary is annualised to determine the appropriate tax rate. Bonuses and one-off expenses are not annualised but taken into account when determining the appropriate tax rate.
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Old 17.10.2017, 17:01
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Re: Partial year - Taxation and Pillar 3a

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[*]certain deductions are pro-rated e.g. Pillar 3a[/LIST]
Nope, you can use the full amount.
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Old 17.10.2017, 17:04
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Re: Partial year - Taxation and Pillar 3a

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Nope, you can use the full amount.
In which case, I think my tax return needs amending (thanks Big 4!)! All my deductions were prorated except for expenses such as interest costs. How do I go about doing that? I would have asked the Big 4 adviser but given they have f-ed up, can't trust their advice any more.
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Old 17.10.2017, 17:11
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Re: Partial year - Taxation and Pillar 3a

I came in June and was allowed to put the full amount into my Pillar 3a account. And they would have told me if it wasn´t allowed when I did my tax return for that year?
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Old 17.10.2017, 17:14
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Re: Partial year - Taxation and Pillar 3a

Can anyone find a link to gov't webpage that states any of this (even a cantonal one)? I cannot.
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Old 17.10.2017, 17:21
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Re: Partial year - Taxation and Pillar 3a

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I came in June and was allowed to put the full amount into my Pillar 3a account. And they would have told me if it wasn´t allowed when I did my tax return for that year?
I am sorry if maybe my previous post came across in the wrong way, I am not disputing your assertion. I am actually quite pleased to read that as it means I can potentially get a bigger refund if I can amend the tax return so I was just asking if you knew how I could amend my tax return.

The logic behind getting the full deduction, if you paid the full amount (similar to interest), makes sense to me and that's what I asked the know it all kid from the Big 4 who prepared the return but was told that is not how it works here. I will be mighty p!ssed off if they cost me money!!
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Old 17.10.2017, 17:29
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Re: Partial year - Taxation and Pillar 3a

Simple: Call your cantons tax office and ask them. They can say how it really is and you can even request a written answer you can legally rely on (even when not according the actual law).

You would find the information under the topic "Unterjährigsteuerpflicht" (Sub annual taxation)

For example Lucerne:
https://steuern.lu.ch/-/media/Steuer...pflicht_02.pdf

Says that single/one of deductions are not prorated, ongoing deductions (like travel and lunch expenses) will be adjusted.
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