they tax you on your "fortune" which means all your assets. cars, artwork, and balance in your bank accounts at the end of the year.

To be 100%, you normally need to declare your total worldwide assets for wealth tax - so all your belongings (cars, houses, boats, jewels, money in cahs and bank accounts wordwide...).

This is actually a really good question! I'm starting out a professional life here in Geneva and we have been very confused with my colleague as to how the tax system works. We've managed to work out that for salaries we're "imposés a la source" but after that it's just one huge question mark. For example, does anyone know how taxe d'habitation works? Is it included in your rent, do you have to pay it to the commune, how much is it? I'd also appreciate some help in this matter :-) Cheers!

If you are "taxed at source", all is included. But pay attention to 2 facts:

1. if your total worldwide wealth is above 52,000chf for a single, 104,000chf for a couple (+ 26,000chf for each child less than 18 years old), then you MUST stop being taxed at source and ask the taxation authorities to send you a tax declaration to be filled in.

The amounts to be taken into account shall include all your belongings wherever they are located (foreign bank accounts, houses abroad, etc).

2. If you have less than these amounts, then you should stay taxed at source as long as you do not have a C-permit (then you will automatically move to the tax declaration system). But even if you are taxed at source, you can deduct some amounts (like a 3rd pillar, health cost, etc).Do not forget to do that, else you'll pay more taxes than needed.

If you live abroad (eg. France) then you will always stay "taxed at source" whatever your worldwide wealth.

Hope this helps,

Didier

thanks didier! this sounds helpful. why is it important to stop being taxed "a la source" above a certain revenue? 

Hi emma,

no problem I went thru this a few years ago.  2 reasons why you must go to tax declarer status if you're above these limits:

1. this is the law... so you need to start paying wealth tax (which you can't do with taxed at source status). If you get caught, you might have to pay a substantial fine... I only escaped it because I could proove my good faith as I went voluntarily to them to explain I didn't do it right.

2. By becoming a tax declarer, you will be able to deduct a lot more things - which can balance the extra sum paid for the wealth tax (which is only 1/thousand). For me, I paid about 1000chf less after I moved to tax declarer.

For background also, if you decide to take a tax advisor, do not accept to pay more than 250chf for your tax return. I know some consultants ask for several thousands and my experience was that they know much less than the small local agencies. If I would have listened to the tax experts paid by my company, I would have paid too much taxes (they left me taxed at source in the first place, which was a big error that I corrected myself...). My advice, take a local small fiduciaire close to where you live - many speak english - some worked for the tax office before becoming independant - so they really know how it works. Avoid the big shops for expats who in some case know less than what you can find on the internet site of the taxation office.

Hope this helps,

Didier

I have just had my initial assessment with PWC yesterday so I think have some colour to add.

If you breach the wealth levels that Didier mentions OR own property here you have to do a full tax return. You do NOT, however, need to stop being taxed at source. I am taxed at source even though I will have to fill out a full return and still benefit from all the allowances etc on my payroll (clearly this would need to be checked by you).

The wealth tax applies on worlwide assets and is a linear sliding scale from 0.20% to 1%. You do not pay tax on any property owned overseas but the value of the property is taken into account to determine your wealth tax rate. Ditto any rental income.

If you are moving here from abroad a big tax saving measure you should look into is your so called second pillar pension allowance. In essence this is a measure to allow you to get your pension to where it would be if you'd started work here aged 25. If you leave the country its subject to a 10% tax. So assuming you pay 40% tax you will save 30% of every franc you put in. It is capped at a % of your salary (for 3 years I think) otherwise you would just pay your whole salary in and live off savings. Your firms pension provider wil be more than happy to help you with this (more money for them).

Regarding costs, PWC charge 2500-3500. This is comparable to what I paid in Dublin but is probably a premium to local firms.

Voila

Feehary,

I don't understand why you would want to stay taxed at source if you need to fill a tax return.  This can happen by error, or for the transition year when you get your C permit, or go above these thresholds.  Let me tell you what happens in that case (since I got the same advice by the very same company).

Be aware that if you continue to be taxed at source and have to fill in a tax return also, these are 2 different departments in the tax services in Geneva. So... you will be asked to pay your taxes by the tax return department (the same amount more or less that you will have already paid thru tax at source monthly deductions), and you will have to ask the tax at source service to transfer the money to the other service... It works in the end, but with quite some rework and takes a few months to settle (with reminders). Good luck. That's what happened to me because I listened to a similar advice you got...

Also, I do not see any advantage to stay taxed at source if you have to fill-in a tax return. All deductions you can get as taxed at source, can be deducted also in your tax return - and in fact, even more items are deductible.  Allowances you get currently as taxed at source, will also be taken into account in your tax return (they appear/are deducted from your income on your year end statement).

Your statements about the 2nd pillar are correct (unless you benefit from a compensation across European pension systems - like in my company).

Only the experience-speaking advice from someone who has gone thru this personally, to avoid you some painful rework.

Didier

Didier,

thanks for all that. Some of what you say just doesn't apply to me. I'm afraid I don't know why, but I know it doesn't. Perhaps its because I have a B permit not a C, or maybe its because PWC do our payroll and all our personal tax stuff as well and so have done a deal to obviate some of the work...

Anyways, the moral of the story is if you can possibly avoid filling out a full tax return this is simplest.

Over and out,

Feehary,

No problem, just trying to help since I was in the very same situation as you (see my PM). Let's talk this matter again in a year's time, when you went thru the process.

Didier

Thanks all for the great information. Do I understand correctly that for welth tax a persons networth at end of the year has to be more than 104K CHF at the end of the year. It is not dependent on what you earn during the year. If you earn more than 100K but spend on rent and living expenses then the net worth at end is not more than 100K unless you save quite and lot over the years and create assets like car, home etc.

Also from this year kindergarten fees can be deducted in Geneva. Does anybody know if the fees for International school can also be deducted as this is a huge amount upto 24K Chf

Any pointer would be great

thanks

I would like to know more about the Wealth Tax system:

-does it mean the tax then will be paid once a year? anyone know the calculation way, percentage?

-i was in the tax at source last year, in which way the tax return can be made, how much percentage of the return?

Any advice would be nice. thank you.

If you are particularly wealthy, say that rich old uncle died and left you a mansion by the lake Cologny, (Good News?) Wealth Tax can absorb a great deal of your annual income.  

It is also true if you sell the mansion and put it on deposit.  This is because the Wealth Tax rates are considerably higher than the interest rate you can earn on a deposit.  Deposit rates are below 0.25% whereas Wealth Tax can easily be 1%.

Your only hope is to put the money you don't need anytime soon into riskier/higher return investments like the stock market.  There you can expect about 3% in dividends.  This means you'll pay about 1% in Income Tax, 1% on Wealth Tax, leaving 1% to spend on your handbags and gladrags.  (However the 1% bank commission on purchasing shares will set you back to zero in the first year.)

HOW WEALTH TAX WORKS:

As at 31st December each year....

Add up all your assets, excluding foreign real estate. So you must list all your bank accounts, portfolios, Swiss properties, furniture, cars, home, cash, insurance policies and so on.  Do not include your Swiss pension plans.

Deduct any debts like mortgages, bank loans, taxes due, or unpaid bills.

The net amount is your "Fortune" for taxation.

When you receive your bill for Income Tax they will add the Wealth Tax.  In other words you will get the final assessment only after the year end.  However, if you correctly estimated your income and fortune at the start of the year (and informed the local Tax Authority), then the payments on account should have roughly taken account of your tax liabilities and you may be left with either a small additional bill or a small refund.   Don't forget that the payments on account won't include Federal Tax unless you specifically requested it.   Therefore you can expect a bill in respect of the Federal Taxes (although there is no Wealth Tax at the Federal level).  Wealth Tax is only payable at the Cantonal and Communal level.

I should add that you can reduce both your Income and your Wealth if you pay money into your pension plan.  Ask your company how much you can pay in. 

Does anyone know a good accountant for tax declaration in Geneva?  The Guides section has only two names in it.

Properties abroad should also be registered.  You advise the purchase priceand then deduct a certain percentage for every year you have lived there.  So it can work out to be quite low and yoiu get tax relief on any repairs.  Useful if you think of selling abroad and buying here.  If you do not declare probably will not be noticed but you are taking a risk

Just went through this for the 4th year in a row. I bought an appartment in 2010 and although staff at an international organization, hence gax exempt on income, I do pay wealth tax on 'fortune' which is the total of assets as mentioned before including homes, cars, investments and so on. The first year (2010) I paid more to the yax advisor (CHF 1,100) than the taxes due somsince then I've done the returns myself. 

Using the GE canton software. In my case, on the 2012 return it calculated the entirely wrong amount, about 19 times the correct amount, so had to write a letter and they corrected it. This is because I am an employee of an international organization: the software asks the right question but then ignores the answer in the calculations, so everyone in the same situation beware of this problem, which repeated itself for the 2013 return.

I can recommend you have it done, especially if the cost is a few hundred CHF, because it is pretty complicated and I'm a CPA and speak reasonable French to boot. The tax in my case does go down year after year (all else being equal) due to the depreciation afforded on your real estate every year.