Optimizing taxes by planning ahead

Optimizing taxes. Reducing your tax burden with good planning.

Distinctions among the cantons including major differences in tax burdens: It can be challenging to stay on top of taxes in Switzerland. So it's even more worthwhile to use comprehensive tax planning aimed at optimizing taxes.

The different tax issues affecting you will depend on your personal situation. If you receive gainful employment income or a pension each month, they are subject to income tax. If you own the property where you live, an imputed rental value is attributed to you as income. Are you retiring soon and drawing your pension capital in the form of a lump-sum payment? If so, the lump-sum payout tax will be an issue for you.

It always makes sense to plan ahead when it comes to tax issues. After all, this allows you to anticipate future tax burdens and, ideally, to even reduce them. The following articles provide you with guidance on various tax-related topics of interest.

Optimizing taxes with early pension provision

For instance, you should give some thought to your personal pension provision even at a young age. With a well-rounded pension plan, retiring can be especially worry free. On top of this, planning ahead for retirement can also make sense from a tax perspective. There are two options in particular that are available to you here:

1. Paying into Pillar 3a

Investing in Pillar 3a is also advisable from a tax perspective. If you take advantage of this, you can deduct the contributions you make from your taxable income (up to the annual maximum amount). 

2. Purchase of pension benefits

Purchasing pension benefits can reduce your tax burden. However, you first need to check your pension fund statement to make sure you are even able to make the corresponding purchases.

Taxes on employee participations

In addition to pension provision, questions may also arise about taxation of gainful employment income. This is particularly true if employee participations are awarded as part of the total compensation package. These are a popular method of motivating and retaining employees in the company.

Employee participations are typically awarded on preferential terms or at no cost. 

Relocating to Switzerland: Information on taxes for newcomers

The federal tax system in Switzerland can be an initial challenge for newcomers since taxation occurs at the federal, cantonal, and municipal levels.

At the same time, tax rates can vary greatly among the different cantons and municipalities in particular. It is thus advisable to learn about your tax burden in your chosen place of residence before moving to Switzerland.

The right way to hold real estate in order to optimize taxes

Investors should think about the optimal way to hold real estate when it comes to taxation. Will the property be held as private assets, business assets, or in a real estate company?

Based on the form chosen, different taxes result from the transaction, how the real estate is held, and its sale. This is because the mandatory taxes are subject to cantonal regulations and thus depend on the location of the property.

Lump-sum payout tax: Include it in your tax planning in good time

Retirement is also the time when you will withdraw your assets from the second pillar and Pillar 3a. However, lump-sum payments are subject to a tax collected separately: the lump-sum payout tax. It varies based on the canton and municipality where you live. Find out ahead of time what the tax rate is at your place of residence.

Everything you need to know about the lump-sum payout tax.