6 Tips for Saving Taxes in Switzerland

By taking clever measures and planning your expenses and income throughout the year, it is possible to save a lot of taxes. In the following article we will present you with 6 simple tipps to reduce your tax burden.

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Clever management of your resources and timely planning enables you to significantly reduce your tax burden. That means, if you manage your finances accordingly and know how to generate tax-free income, you don't have to worry about your tax return arriving at your door.

You can benefit form a tax reduction if you follow our 6 simple saving tipps.

This is where you will pay the least amount of taxes!

Discover the three most attractive cantons in Switzerland from a tax perspective

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Pension payments (third pillar)

By assigning money to your pension plan or to be precise by making payments into the third pillar (Säule 3a), you not only provide for your old age, but also reduce your tax burden. This is because the credit balance in the third pillar is only taxed when it is paid out.

For the year 2021 employees can make payments up to CHF 6883 into the third pillar which are deductable from income in the tax return. For self-employed people the maximum permissible sum is 20 percent of net income or CHF 34,416.

Insurance premiums

Premiums for health, accident, life and pension insurance can be deducted from taxable income.

For direct federal tax, the maximum possible deduction is CHF 1700 for single taxpayers and CHF 3500 for married people.

Donations

Do something good and save taxes at the same time. Donations to charitable organizations, and in some cantons even to political parties and trade unions, reduce your tax burden.

Voluntary donations to charitable organizations of up to 20 percent of net income can be deducted from taxes.

But beware: the amount of donations for a tax year must be at least CHF 100 to be deductable.

Buying into the pension fund

Many Swiss have a pension gap because they have not made any or enough payments into their pension fund (Berufliche Vorsorge).

Making purchases into the pension fund can close these gaps and save taxes at the same time, because subsequent purchases into the pension fund can be deducted from taxable income in full. The maximum possible purchase amount can be found on the pension fund statement.

But be careful: Before paying in, check the situation of your pension fund, because if there is a threat of restructuring or partial liquidation, you will also be paying for this and might lose some money.

Deduction of training costs

Learning something new and save taxes at the same time? - That's possible! Costs for job-related training can be deducted up to a maximum of CHF 12,000, provided that the costs were paid for by the taxpayer and not by his or her employer.

However, only costs that are related to the taxpayer's profession are deductible. For example, a banker can deduct the price of a management training course, but not the price of a salsa dancing class.

Relocation

As a last resort to save taxes there is always the option to change the municipality and canton of residence or to put it in simpler terms: to move. A change of residence to a place with lower taxes can often save thousands of francs, as the tax rates vary widely in the different cantons and municipalities. Anyone who moves during the course of a year will be assessed for the entire tax year by the tax office at the new place of residence.

Do you need help in minimizing deductions? The specialists at taxea are happy to assist you with their comprehensive expertise.

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