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Old 23.09.2020, 11:40
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Zurich / 2020 Provisional tax invoice: shall I pay it now?

Hello,

I have just received the provisional tax invoice for the year 2020.

The deaadline is Sept. 30, however it is my understanding that I can choose not to pay it at this time.
1. What is the interest if I decide not to pay it?, is it just 0.25% per year (i.e., 50 CHF/year on a 20K bill)?
2. If the interest is low enough, I would probably be better off putting that money into a dividend paying stock, or I am missing something?
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Old 23.09.2020, 11:44
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Re: Zurich / 2020 Provisional tax invoice: shall I pay it now?

You will also reduce your fortune for 1 January 2021. Of course how much you save depends on your situation.
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Old 23.09.2020, 12:20
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Re: Zurich / 2020 Provisional tax invoice: shall I pay it now?

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You will also reduce your fortune for 1 January 2021. Of course how much you save depends on your situation.

That's 0.15% up to > 1.3M CHF https://taxsummaries.pwc.com/switzer...al/other-taxes
or 30 CHF on a 20K tax bill. I would not lose my sleep over it
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Old 23.02.2021, 12:21
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Re: Zurich / 2020 Provisional tax invoice: shall I pay it now?

Piggyback on this topic.


Is the tax bill for 2021 due at the end of September 2021? Do they start charging penalties in October 2021 or January 1st 2022? What is the latest I can pay without penalty



I have always paid early for the interest and simplification/piece of mind, but this year I'm realizing the tax money is worth a lot more to me throughout the year than 0.25% interest.
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Old 23.02.2021, 14:07
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Re: Zurich / 2020 Provisional tax invoice: shall I pay it now?

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Is the tax bill for 2021 due at the end of September 2021? Do they start charging penalties in October 2021 or January 1st 2022? What is the latest I can pay without penalty
Tax for the year 20XY is due on September 30 20XY.
Anything paid before September 30 is awarded with 0.25% interest.

From September 30 till you get the final bill:
Anything paid more than due is awarded with 0.25% interest.
Anything paid less than due is penalized with 0.25% interest.

Once you get the final bill you have 30 days to pay the difference (if there is any). if you do not pay in time the penalty interest raises to 4.5%.

(Applies to canton Zurich. Interest is per year, and calculated pro rata to the exact date.)
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Old 23.02.2021, 19:48
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Re: Zurich / 2020 Provisional tax invoice: shall I pay it now?

Don't pay today what you can pay tomorrow.
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Old 23.02.2021, 20:32
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Re: Zurich / 2020 Provisional tax invoice: shall I pay it now?

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Tax for the year 20XY is due on September 30 20XY.
Anything paid before September 30 is awarded with 0.25% interest.

From September 30 till you get the final bill:
Anything paid more than due is awarded with 0.25% interest.
Anything paid less than due is penalized with 0.25% interest.

Once you get the final bill you have 30 days to pay the difference (if there is any). if you do not pay in time the penalty interest raises to 4.5%.

(Applies to canton Zurich. Interest is per year, and calculated pro rata to the exact date.)
not exactly "Anything paid more than due is awarded with "as it was abused to get higher interest rates than bank would do - depends on canton - up to 200% of what you owe - above that it's 0%.

and not exactly panalized in this COVID year (2019 & 2020) as far I know

https://www.estv.admin.ch/estv/de/ho...id19/news.html
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Old 23.02.2021, 21:04
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Re: Zurich / 2020 Provisional tax invoice: shall I pay it now?

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Tax for the year 20XY is due on September 30 20XY.
Anything paid before September 30 is awarded with 0.25% interest.

From September 30 till you get the final bill:
Anything paid more than due is awarded with 0.25% interest.
Anything paid less than due is penalized with 0.25% interest.

Once you get the final bill you have 30 days to pay the difference (if there is any). if you do not pay in time the penalty interest raises to 4.5%.

(Applies to canton Zurich. Interest is per year, and calculated pro rata to the exact date.)



Thank you aSwissInTheUS.


If I understand correctly: If I pay nothing until I get the final bill (and pay within 30 days), it will cost me the final amount plus 0.25% interest on the entire amount over the time between September 30th and the final bill?
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Old 23.02.2021, 21:08
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Re: Zurich / 2020 Provisional tax invoice: shall I pay it now?

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Don't pay today what you can pay tomorrow.
Are you suggesting I ask the question again tomorrow?
Who knows how broke I will be in September - or when the bill is due !



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not exactly "Anything paid more than due is awarded with "as it was abused to get higher interest rates than bank would do - depends on canton - up to 200% of what you owe - above that it's 0%.

and not exactly panalized in this COVID year (2019 & 2020) as far I know

https://www.estv.admin.ch/estv/de/ho...id19/news.html

You're referring to the case where one would get the Provisional tax for 12345.- CHF, then pay in (200% x 12345.-CHF) hoping to score that sweet 0.25% interest with all their side scratch.


Thanks for the link - I did consider it before, assumed there was some sort of limit anyways, but good to know the details.
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Old 05.07.2021, 12:47
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Re: Zurich / 2020 Provisional tax invoice: shall I pay it now?

Ok I got a provisional tax demand through today from Zurich as well. Now its asking for 2.7k CHF but I filed my official return for 2020 a few months ago via my accountant and they owned me about 3.5k CHF from the accountants figures rather than the other way around. They're asking for the cash by 1 August.

What's the scoop - should I still pay this and wait to get more back later or do I need to call the tax office and query it as in theory I shouldn't owe this (but I realise it can take some years to get a tax rebate back here anyway)?

I assume these provisional one is purely based from an initial calculation of income so includes no reductions. I thought I'd ask you experts on here before I otherwise head over to the accountants when I'm in the office in a few days.
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Old 05.07.2021, 13:05
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Re: Zurich / 2020 Provisional tax invoice: shall I pay it now?

The tax years are separate, unless you have the final tax statement and they can reclassify any credit to the next year. Until then you owe them for the new tax year.


But give them a call, I found them always to be very helpful.
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Old 05.07.2021, 13:22
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Re: Zurich / 2020 Provisional tax invoice: shall I pay it now?

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Who knows how broke I will be in September - or when the bill is due !
I have found out it is wise practice to have a separate bank account (savings account) to stash away tax money. I put aside a part of my income every month (automatic transfer) and once the money is on that account I pretend it doesn't exist so there is no short term borrowing to balance other accounts or anything like that. When I get a bonus or my 13th month salary I similarly transfer the appropriate part of that.

Since I've been doing this tax bills are no longer an issue.
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Old 05.07.2021, 13:31
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Re: Zurich / 2020 Provisional tax invoice: shall I pay it now?

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The tax years are separate, unless you have the final tax statement and they can reclassify any credit to the next year. Until then you owe them for the new tax year.

But give them a call, I found them always to be very helpful.

No this is for 2020 not 2021. If it was for 2021 I'd understand it a bit more (as that would be like the UK payment on account).

Last edited by Spaceghost; 05.07.2021 at 13:51.
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