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-   -   2021 tax change - taxation ordinaire ultérieure (https://www.englishforum.ch/finance-banking-taxation/304784-2021-tax-change-taxation-ordinaire-ult-rieure.html)

Dinivan 28.06.2021 16:01

2021 tax change - taxation ordinaire ultérieure
Apparently there has been a change in the tax code starting from 2021 where residents who pay ŕ la source can now choose to pay with an ordinary tax in order to implement a fairer system. In some cases this is compulsory (gross salaries above 120K).

Does anyone have an experience with this? would you recommend switching to an ordinary tax declaration? are the potential deductible expenses worth the change?

Medea Fleecestealer 28.06.2021 17:17

Re: 2021 tax change - taxation ordinaire ultérieure
Far as I know it's always been possible for B permit holders to request to fill in a tax form; maybe it's something Geneva specific? B permit holders who earn more than 120k have always had to fill in a tax return.

John_H 28.06.2021 17:25

Re: 2021 tax change - taxation ordinaire ultérieure
In Geneva the limit was / is 500k no? Or other reasons like owning property abroad..

I'm useless at tax stuff but I'm pretty sure I pay more on ordinary tax than i ever did tax at source. Plus i prefer that i don't see the money, i hate having to actually pay it, it just feels more painful to me.

HIAO 28.06.2021 19:22

Re: 2021 tax change - taxation ordinaire ultérieure
Yes. There's been a tax reform to harmonise taxes in GVA, where possible with all cantons, from 1 Jan 2021.

From this point, Geneva based workers (except cross border workers), with income over CHF 120k, or who own property, have taxable wealth, or other income not taxed at source, are subject to ordinary tax rule. This also applies to workers who are taxed at source.

In most cases, this reform means that the annual cycle to demand a tax rectification in most situation (such as for 3rd pillar contributions) is no longer applicable.

Those who are not meeting these conditions can make a one time election to opt for the ordinary tax rule to be permanently applied.

Cross border workers can voluntarily file a deemed resident tax return in Switzerland if more than 90% of their and spouses combined income is taxable in Switzerland.

erikdebest 29.06.2021 10:04

Re: 2021 tax change - taxation ordinaire ultérieure
For two people, both single, living in Zurich city and both earning the same amount in 12 equal monthly payments, with no exceptional high deductions for eg work related costs, the person paying tax at source will pay less taxes than the person on ordinary taxation. Two reasons is that the lumpsum work related costs used as basis for tax at source are 10% of the gross income. You can only accomplish that in ordinary taxation if you have a GA, need a car, take a lot of courses... Other reason is that city of Zurich has 119% taxes (used for the ordinary taxation), while the tax at source is at the cantonal average of 100% (used for tax at source).

So, the person taxed at source had a special "form" to handle in extra deductions, as for example the 3a, child care (eg KITA). The amount paid throughout the year wasdivided by 12 and deducted from the monthly income.

Now, that special form does not exist anymore, everyone has the ordinary taxation. If you request that to declare the contributons to eg your 3a pillar, you will also have to declare actual work related costs. So if yout income is 100.000, the lump sum used in the tax at source was 10.000. Are your actual work related costs that high?

So indeed a very good question, you will have to compare. IN our case, when we were taxed at source we paid way more than in ordinary taxation, so our tax was reassessed in the ordinary way (but we needed a lawyer to get that).

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