taxea | Tax return for startups

The most important questions about the tax return

Do I have to pay tax on winnings from gambling?

Winnings from casino games that are earned in Swiss casinos are still tax-free. Winnings arising from online participation in casino games, provided that these are permitted in Switzerland, and winnings arising from participation in large-scale games such as lotteries, sports betting and large-scale skill-based games (example: online Jass from Swisslos), are tax-free up to CHF 1 million. Winnings from permitted small-scale games, such as small-scale lotteries, raffles and sports betting, which are not automated, not online and not intercantonal, are fully tax-free. Winnings from lotteries and skill-based games which serve to promote sales are tax-free up to CHF 1,000. Winnings with a value of more than CHF 1,000, including non-cash prizes such as cars, are fully taxable. Winnings from foreign games or games not permitted in Switzerland are fully taxable.

Are family / children's benefits taxable?

Family benefits (children's and education allowances) constitute taxable income and must be declared in the tax return.

Our son will start his apprenticeship next year. However, he is not yet of legal age. Does he now have to fill out a tax return, or do we as parents have to pay tax on his apprentice's salary?

No. Taxpayers are assessed independently for the first time for the tax period in which they become of age. Up to then, underage children are assessed together with their parents. However, work-related earnings of minors are excluded. In principle, these are not taxed on the parents, but on the minor child. Since hardly any taxable income remains from an apprentice's salary - which is within the normal range - after all deductions, such income is generally not taxed. However, from the year in which your son comes of age, he must complete a tax return and declare his salary (no tax allowance). Of course, the corresponding deductions can be claimed analogously.

Is an occasional sideline business taxable?

Yes. All income is taxable. However, professional expenses (flat rate of 20% of income or actual costs) may be deducted from income.

How do scholarships have to be taxed?

Scholarships do not have to be taxed, as long as the scholarships paid during the education together with other income do not cover more than the costs of education and the necessary living expenses.

Do social assistance funds have to be taxed?

Support benefits, such as nursing care contributions, helplessness allowances, supplementary benefits, grants-in-aid, unemployment benefits and municipal subsidies paid to recipients of AHV, Disability Insurance (Invalidenversicherung, "IV") and Compulsory Accident Insurance (Obligatorische Unfallversicherung, "UVG") benefits are not taxable.

Does the Individual Premium Reduction (Prämienverbilligung, "IPV") have to be declared as income?

The Individual Premium Reduction need not be declared as income. However, the IPV must be deducted from the insurance premiums claimed.

Is income from subletting taxable?

The tenant has to tax the income arising from subletting as income if the income arising from subletting is higher than the rent agreed in the main tenancy.

We purchased a detached house last January. Since some renovation work still had to be done, we only moved in during July. Do we now have to pay tax on the imputed rental value for the whole year?

No, if the house has not been habitable due to renovation, you must declare the imputed rental value only after moving in.

My parents have transferred their property to me within the framework of a preferential inheritance. However, they continue to live in the property and have the right of lifelong usufruct. At this time, who has to pay tax on the property?

Properties encumbered with a usufruct are generally taxed by the usufructuary; that is, income (imputed rental value / rental income) less maintenance costs and mortgage interest. As long as the usufruct exists, the owner does not have to declare such a property subject to usufruct in his or her tax return.

I will move my residence from Zurich to Bern on 01.10.2020. When will I have to pay tax on my income in Bern?

You must pay tax on your income in Bern starting on 01.01.2020. In the event of a change of residence, the residence at the end of the tax period is decisive. The taxpayer becomes liable for tax at the place of moving in for the entire tax period.

I am involved in an undistributed inheritance. How do I have to declare this income in my tax return?

Income from an undistributed inheritance is taxable from the day following the date of death by the individual heirs on a pro rata basis (according to their inheritance share) or must be declared in their tax returns.

Can the costs for the use of a workroom (at home) be deducted?

A workroom deduction can only be granted if a substantial part of the professional work must regularly be done at home, because the employer does not provide a suitable workplace and the taxpayer has a special room in his or her private home which is used mainly for professional (and not private) purposes. Anyone who performs work at home only for personal convenience, although a workplace is available from the employer, cannot claim a deduction. If a deduction is claimed for a workroom, the relevant evidence must be enclosed with the tax return (confirmation from the employer). In the case of "smart working", where employees in the company have (only) flexible workplaces at their disposal, as a rule, no private workroom deduction can be claimed.

Can I claim job search expenses under professional expenses?

If a new job is sought while exercising gainful employment, the expenses incurred in connection with applications are not deemed to be occupational costs, and therefore cannot be deducted. The situation is different with unemployment.

I was unemployed the whole year and received daily allowances. Can I claim professional expenses?

Yes. The flat-rate deduction for professional expenses can be claimed. If higher expenses in connection with applications are proven, such expenses will be deducted instead of the flat-rate deduction.

How much can I deduct for the purchase of work clothes?

Only those work clothes that are used exclusively for professional and work purposes, such as work coats, work aprons, protective clothing, rubber boots, etc., are eligible for deduction. The corresponding expenses are included in the flat rate for other professional expenses. However, clothes that have to be worn because of the professional position (suits, ties, haute couture fashion, etc.) are excluded.

I have heard that there has been a significant change in the deductible costs for vocational training and further education. Is that true?

Since the 2016 tax period, vocation-oriented training and further education and retraining are deductible up to a maximum amount of CHF 12,000. In principle, the distinction between deductible further education and non-deductible training has been dropped. The following conditions must be met for deductibility: a qualification at secondary level II (for example, the Matura examination or vocational training) must be present, or the applicant must have reached the age of 20 and must not have paid any training costs up to the first qualification at secondary level II.

Can the costs (meals, train, school materials) incurred by children for attending the cantonal school be deducted by their parents?

No. Education costs of the children are living expenses and cannot be deducted. However, parents are entitled to the child deduction (social security deduction) until the end of the initial education.

Our son has been taking regular private lessons since last summer and our daughter was in a ski camp this year. Where in the tax return can we deduct the costs incurred in this connection?

Education and living costs of (minor) children, which are incurred by the parents, are taken into account for tax purposes through the child deduction and the additional insurance deduction. Costs exceeding this are deemed to be non-deductible private living expenses (sports courses, holiday camps, playgroups, private lessons, language schools, etc.).

Are leasing costs deductible?

No. A lease agreement is not a loan agreement and therefore does not constitute an interest-bearing capital debt.

I was unemployed the whole year and received daily allowances. My spouse was working. Can I claim the special deduction if both spouses are gainfully employed?

Yes, the special deduction upon the gainful employment of both spouses can be claimed if, instead of income from gainful employment, alternative income such as the unemployment benefit or maternity benefit is declared.

Why can I no longer claim the social security deduction for my daughter, who studied until 31 August in the tax return for the corresponding year? I had to support her up to this point in time.

For the assessment of social security deductions, the situation on 31 December of the respective tax period or at the end of the tax liability is decisive (principle of cut-off date).

During Christmas 2019, we donated a large amount of money to a charitable organisation via e-banking. However, the bank did not execute the payment order until after the holidays, at the beginning of 2020. Can we still claim the donation in the 2019 tax period?

No, donations are generally deductible at the time of payment. The date of the cash outflow is decisive (postmark for cash payments at the counter, or date of the debit note for bank transfers).

Filling out my tax return becomes more complicated every year. Therefore, I had to have a trustee fill it out this year. Where can I deduct such costs?

The costs for preparing a tax return are not deductible.

I took on a new job and relocated, as my commute would otherwise be too long. Can I claim the relocation costs with my professional expenses?

No, relocation costs are regarded as private, non-deductible living expenses.

Can I deduct my debt interest without limitation?

Debt interest can only be deducted to the extent that it does not exceed the gross income arising from movable and immovable assets (including imputed rental value) and an additional amount of CHF 50,000.

Our 16-year-old daughter is her first vocational training. We paid a very high dental bill for her. Can we, as parents, deduct such costs in our tax return?

Yes. If parents are responsible for a child's means of subsistence and are therefore entitled to a child deduction, they can deduct the sickness and accident costs borne by them.

Are contributions to a renovation fund (of a condominium owner community) deductible?

Yes. The annual deposits can be deducted as property maintenance, provided that the funds are used to cover the maintenance costs of the community facilities.

Can cable connection fees for television and radio be deducted as property maintenance?

One-time contributions of a property owner, such as cable connection fees for television and radio and other connection fees for sewerage, water, gas, etc., are not deductible.

Can maintenance and administration costs exceed the imputed rental value?

Yes, the total effective, deductible maintenance and administration costs can be deducted. Even if they exceed the imputed rental value.

We renovated our property in 2019. Most of the invoices were issued in 2019, but a few invoices were not billed until 2020. We did not pay most of the invoices until 2020. In which year can we claim the property maintenance costs?

In the case of property held as private property, the deduction must be made either at the time of maturity or at the time of payment of the debt. Once a choice has been made, it must be adhered to.

How do I have to list a leased vehicle in my assets?

Not at all. If you lease a vehicle, you are not the owner of the vehicle. Consequently, the vehicle does not constitute a taxable asset.

My partner and I have a joint household account. However, we are not married (unmarried coupling) and therefore each of us fills out a separate tax return. Who now has to declare the account and the income from it?

In the case of a joint account, the capital and income corresponding to the shares must be listed in the relevant schedule of securities & assets (with an indication of who declares the other share).

I have set up an account in the name of my godchild, to which I deposit something every year. Who has to declare the account until the child comes of age? Me or the child's parents?

If the account is in the name of your godchild, the parents must declare the account and the income from it. However, if you have simply opened an additional savings account for yourself with the remark/heading "godchild XY", you will have to pay tax on the account and the income from it.

With what value is the private motor vehicle to be entered in the tax return under assets?

A private motor vehicle must be declared with its current market value. Different annual depreciation rates apply depending on the canton of residence.

I invested in the cryptocurrency Bitcoin. How do I have to pay tax on my Bitcoin account or at what value (rate) do I have to declare the Bitcoins? I have earned a portion of my Bitcoins through "mining" – do I have to tax this gain as income or is this deemed to be a tax-free capital gain?

Cryptocurrencies are to be considered similar to foreign currencies and must be declared in the schedule of securities & assets. In principle, such currencies are only relevant for wealth tax (price gains are tax-free). If a commercial trade in cryptocurrencies exists, profits are taxable as income arising from self-employment. If you possess cryptocurrencies which you have earned through mining, you will earn taxable income to this extent. In such case, a statement of income and expenses must also be enclosed with your tax return. In principle, proof of assets in cryptocurrency can be provided by printing out your wallet's year-end balance. The tax values of the most important cryptocurrencies (for example, Bitcoin - BTC; Ethereum - ETH; Ripple - XRP; Litecoin - LTC) are published in the exchange list of the Federal Tax Administration.

This year we made a down payment for the purchase of a condominium. Completion and move-in are not planned until next year. How do we have to declare the down payment in this year's tax return?

You can declare the down payment under "other assets".

How should houses under construction be assessed?

For houses under construction that are to be valued at market value, a percentage of the invested construction costs is added to the price of the land (between 60 - 70% in most cantons).

How high is the taxable value for holiday homes and apartments in other cantons?

For holiday homes and apartments in other cantons, the values determined by the canton in which the property is located are assumed.

I have securities assets, and withholding tax was deducted from my income. I am taxed at the source. How can I now reclaim the withholding tax?

The withholding tax can be reclaimed by means of a supplementary assessment of the source tax. The relevant forms can be obtained from the municipal tax office or the cantonal tax office.

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The most important questions about the tax return