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-   -   Queries on tax calculation and filing taxes (https://www.englishforum.ch/finance-banking-taxation/301026-queries-tax-calculation-filing-taxes.html)

hyper 02.11.2020 20:58

Queries on tax calculation and filing taxes
 
Hello Folks,

My wife and I live in BL canton and this will be our first full tax year while living and working in Switzerland.

For the tax year 2020, we received a tax declaration form few months back. We filled in our expected income and deductions and sent it back to the authorities.

Basis our declaration, we have now received 3 documents -
1. Steuerrechnung Bundessteuer 2020 provisorisch (Provisional Tax Bill for federal taxes) - Rate applied is 7.3%
2. Steuerrechnung Staatssteuer 2020 provisorisch (Provisional Tax Bill for cantonal taxes) - Rate applied is 12.4%
3. Gemeinde Steuerrechnung 2020 (Tax Bill for Gemeinde Binningen) - This is calculated as 48% of the BL tax (effective rate ~6% of overall salary)

Q1 - Is the gemeinde tax a part of the cantonal tax or additional? For instance, is our overall tax rate (7.3 + 12.4 = 19.7%) or (7.3 + 12.4 + 6 = 25.7%)?

Both our employers are deducting monthly witholding tax which is approx. 15% tax rate for both of us which is lower than the actual rate of tax calculated by the authorities in either case.

Q2 - Assuming the tax calculation by the authorities is correct, is the lower witholding tax standard practice or is there a discrepancy in the witholding tax calculation by both employers? This is just to understand so that we can manage our finances better for the lumpsum outgo.

For doc 1 and 2, the letter mentions provisional tax and the orange payment slips do not specify an amount. For doc 3, the balance amount to be paid is specified in the orange payment slip and the due date is for this month.

Q3 - Given the above, am I correct in understanding that we do not need to pay the provisional federal and cantonal tax right now? And that we need to calculate and pay any outstanding tax while filing the taxes early next year?

Q4 - When we file the taxes for 2020, do we need to file a full tax return or source tax correction?

Q5 - Lastly, do we need to file separately for all three authorities or just file it with the BL canton? Consequently, will extra payment/refund be processed by a single authority (i.e. BL canton) or differently by all 3 authorities?

Thank you if you read upto here and an additional thanks in advance for your help. :)

Landers 02.11.2020 21:21

Re: Queries on tax calculation and filing taxes
 
Quote:

Originally Posted by hyper (Post 3234742)
Hello Folks,

For the tax year 2020, we received a tax declaration form few months back. We filled in our expected income and deductions and sent it back to the authorities.


They asked you to do this? Sounds odd but maybe a BL thing??


With such low tax rates and tax at source I'm surprised you'll need to do a full tax declaration. I think maybe you're 'jumping the gun'?



Generally if there's no "due by" then it's a pre-payment. If you haven't paid sufficient tax in the year then you usually have to pay interest on the outstanding amount.

NotAllThere 02.11.2020 22:04

Re: Queries on tax calculation and filing taxes
 
Quote:

Originally Posted by hyper (Post 3234742)
Q1 - Is the gemeinde tax a part of the cantonal tax or additional? For instance, is our overall tax rate (7.3 + 12.4 = 19.7%) or (7.3 + 12.4 + 6 = 25.7%)?

There are three taxes. Federal, cantonal, Gemeinde. You add them up.
Quote:

Q2 - Assuming the tax calculation by the authorities is correct, is the lower witholding tax standard practice or is there a discrepancy in the witholding tax calculation by both employers? This is just to understand so that we can manage our finances better for the lumpsum outgo.
Quellensteuer is based on an average of the Gemeinde in the canton. Many people find that when they fill in a tax return, they end up owing money.

Quote:

For doc 1 and 2, the letter mentions provisional tax and the orange payment slips do not specify an amount. For doc 3, the balance amount to be paid is specified in the orange payment slip and the due date is for this month.

Q3 - Given the above, am I correct in understanding that we do not need to pay the provisional federal and cantonal tax right now? And that we need to calculate and pay any outstanding tax while filing the taxes early next year?
They give you payment slips so you can make payments on account, if you want to. For any over payment they'll pay interest. Up to a 50% overpayment.

Quote:

Q4 - When we file the taxes for 2020, do we need to file a full tax return or source tax correction?
I've never heard of a "source tax correction". If you are required to fill in a tax return (e.g. your joint income is more than 120K, or you own property), they'll send you one.

Quote:

Q5 - Lastly, do we need to file separately for all three authorities or just file it with the BL canton? Consequently, will extra payment/refund be processed by a single authority (i.e. BL canton) or differently by all 3 authorities?
Federal and canton bills tend to come together, the gemeinde one separately, but the return is just one and covers all three authiorities. Use EasyTax to submit your return (partially) electronically.

newtoswitz 02.11.2020 22:07

Re: Queries on tax calculation and filing taxes
 
1. The gemeinde tax is in addition to the cantonal tax.

1. / 2. It's not surprising the rate is higher, as your employers will base the tax-at-source rate on only one salary, the two together will end up in a higher band.

3. The Baselland site has a page with tax FAQ that Google translate makes a decent job of:

https://translate.google.com/transla...um-steuerbezug

4. ?

5. Unless BL is different to SG, you only do one tax return and it goes to the gemeinde.

Landers 02.11.2020 23:19

Re: Queries on tax calculation and filing taxes
 
Quote:

Originally Posted by NotAllThere (Post 3234772)

I've never heard of a "source tax correction".


He's talking about a correction of quellensteuer 'source tax' for people who don't have to submit a tax return in cases where e.g. they might have more deductions than the quellensteuer provides.

NotAllThere 03.11.2020 10:51

Re: Queries on tax calculation and filing taxes
 
Quote:

Originally Posted by newtoswitz (Post 3234776)
5. Unless BL is different to SG, you only do one tax return and it goes to the gemeinde.

BL isn't different. It goes to the Gemeinde.

hyper 03.11.2020 22:49

Re: Queries on tax calculation and filing taxes
 
Quote:

Originally Posted by Landers (Post 3234751)
They asked you to do this? Sounds odd but maybe a BL thing??


With such low tax rates and tax at source I'm surprised you'll need to do a full tax declaration. I think maybe you're 'jumping the gun'?

They sent the tax declaration form in July asking us to fill it and return by 31 Aug. So, it wasn't a choice. Basis what we have declared, they have sent the calculations and additional taxes to be paid.

Landers 03.11.2020 23:33

Re: Queries on tax calculation and filing taxes
 
Quote:

Originally Posted by hyper (Post 3235202)
They sent the tax declaration form in July asking us to fill it and return by 31 Aug. So, it wasn't a choice. Basis what we have declared, they have sent the calculations and additional taxes to be paid.


I find it very odd that they send a declaration for the year 2020 which hasn't ended yet. I guess all the figures must all have been provisional. I suppose you fill out a final one for 2020 in 2021? I suppose in BL they want taxes in advance of the end of the tax year.
Maybe it seems odd to me because I got my first request for a tax return about 4 years after I moved here.

hyper 04.11.2020 00:03

Re: Queries on tax calculation and filing taxes
 
Quote:

Originally Posted by Landers (Post 3235221)
I find it very odd that they send a declaration for the year 2020 which hasn't ended yet. I guess all the figures must all have been provisional. I suppose you fill out a final one for 2020 in 2021? I suppose in BL they want taxes in advance of the end of the tax year.
Maybe it seems odd to me because I got my first request for a tax return about 4 years after I moved here.

As per the link shared by newtoswitz (https://translate.google.com/transla...um-steuerbezug), it seems they would normally send the provisional invoice (for 2020) based on the last definitive assessment in January 2020 which is to be paid by 30 Sep 2020.

Since it is our first full tax year in BL, looks like we got the tax declaration form and then the provisional invoice which is to be paid within 30 days of getting the invoice.

The final / definitive one for 2020 will need to be filed in 2021. Still not clear how and when any additional taxes paid will be refunded.

Phil_MCR 04.11.2020 00:14

Re: Queries on tax calculation and filing taxes
 
Quote:

Originally Posted by Landers (Post 3235221)
I find it very odd that they send a declaration for the year 2020 which hasn't ended yet. I guess all the figures must all have been provisional. I suppose you fill out a final one for 2020 in 2021? I suppose in BL they want taxes in advance of the end of the tax year.
Maybe it seems odd to me because I got my first request for a tax return about 4 years after I moved here.

In Basel Land the tax payment date is before the year end, so you need to pay based on an estimate. The due date for payment has already passed. The gemeinde due date may be different from the canton to further confuse things. Federal taxes are due after 2020 so they can be done based on the calculated tax.

When I moved from BS to BL, I ended up paying 'double' tax as BS tax is paid in arrears and BL in advance so I ended up having a cash flow issue.

Having moved 8 times in Switzerland, I've been continually surprised by the differences in taxation between cantons... :D

hyper 04.11.2020 00:33

Re: Queries on tax calculation and filing taxes
 
Quote:

Originally Posted by newtoswitz (Post 3234776)
3. The Baselland site has a page with tax FAQ that Google translate makes a decent job of:

https://translate.google.com/transla...um-steuerbezug

This is really helpful; clears a lot of the doubts.

The only thing that I could not understand right now (seems to be lost in translation) is once we file the definitive assessment, in case of a refund, will BL process it for all three parts of the tax paid?

Interesting point - "According to the Emergency Ordinance, from March 25 to December 31, 2020, no default interest is owed for taxes levied by the canton under Section 3 of the State and Municipal Taxes Act of February 7, 1974 4) . No default interest is owed from March 1 to December 31, 2020 for direct federal taxes." ---- Seems like a concession made for Covid.

hyper 04.11.2020 00:44

Re: Queries on tax calculation and filing taxes
 
Quote:

Originally Posted by Phil_MCR (Post 3235227)
In Basel Land the tax payment date is before the year end, so you need to pay based on an estimate. The due date for payment has already passed. The gemeinde due date may be different from the canton to further confuse things. Federal taxes are due after 2020 so they can be done based on the calculated tax.

While the regular due date has passed, we received the provisional tax bill just last week. So, we need to pay the cantonal and gemeinde tax within 30 days now. At least a relief that the federal taxes can be paid by 1 March next year.

Quote:

Originally Posted by Phil_MCR (Post 3235227)
I ended up having a cash flow issue.

My situation exactly right now. I had no idea that our withholding from the employers was significantly less than the overall tax liability. So, the balance amount in the provisional calculation is quite high. Some extra saving due to no vacation expenses in Covid year will help pay the tax. :rolleyes:

newtoswitz 04.11.2020 08:28

Re: Queries on tax calculation and filing taxes
 
Quote:

Originally Posted by hyper (Post 3235231)
This is really helpful; clears a lot of the doubts.

The only thing that I could not understand right now (seems to be lost in translation) is once we file the definitive assessment, in case of a refund, will BL process it for all three parts of the tax paid?

Interesting point - "According to the Emergency Ordinance, from March 25 to December 31, 2020, no default interest is owed for taxes levied by the canton under Section 3 of the State and Municipal Taxes Act of February 7, 1974 4) . No default interest is owed from March 1 to December 31, 2020 for direct federal taxes." ---- Seems like a concession made for Covid.

Not BL canton but your local gemeinde.

Yes, they handle everything through their accounts, you don't have to deal separately with the cantonal or federal authorities.

st2lemans 04.11.2020 08:34

Re: Queries on tax calculation and filing taxes
 
I never pay the estimated tax.

Tom

gipfelisturmer 04.11.2020 09:56

Re: Queries on tax calculation and filing taxes
 
Quote:

Originally Posted by st2lemans (Post 3235266)
I never pay the estimated tax.

Tom

You don't live in BL, which has different rules than TI, as described above by Phil_MCR.

fatmanfilms 04.11.2020 10:48

Re: Queries on tax calculation and filing taxes
 
Quote:

Originally Posted by dbucar (Post 3235314)
You don't live in BL, which has different rules than TI, as described above by Phil_MCR.

If you don't pay the estimate you pay interest, if you pay early you get interest.


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