The individual cantons in Switzerland can organize their own taxation procedure. Therefore, different income tax rates apply in the various cantons, as well as canton-specific regulations for filing the tax return. Taxpayers are required by the Zurich Cantonal Tax Administration to submit a tax return if they are at least 18 years old. The canton of Zurich is referred to as the economic engine of Switzerland, as approximately one fifth of the gross domestic product is generated there. With 1,566,700 inhabitants, Zurich is the most populous Swiss canton. The canton is divided into eleven districts and 162 communes.
Tax rate in the canton of Zurich
The canton of Zurich is one of the cantons with an above-average income tax rate.
The average income tax rate of all Swiss cantons is 33.52 percent. In the canton of Zurich, an income tax rate of 39.63 percent applies.
In the individual districts and municipalities of the canton, however, the tax burden varies. It is not only the canton of Zurich itself that levies a tax. Taxpayers are also charged taxes by the federal government and by the municipality. If you belong to a church, church tax is added. How high the tax burden actually is in the end in the canton of Zurich also depends on the respective municipality.
The individual municipalities report municipal tax rates to the cantonal tax administration.
In addition to income tax, individuals must pay property tax. The wealth tax rate is expressed in per thousand and relates to the total wealth. In the event of an inheritance or gift, inheritance tax or gift tax must also be paid.
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Cantonal Tax Administration in the Canton of Zurich
Taxpayers in the Canton of Zurich are requested by the Cantonal Tax Administration to submit a tax return. This is the web address of the Zurich Cantonal Tax Administration:
https://www.zh.ch/de/finanzdirektion/steueramt.html
The Zurich Cantonal Tax Administration has the following postal address:
Zurich Cantonal Tax Office
Bändliweg 21
8090 Zurich
Contacting the cantonal tax office can also be done by phone or e-mail. The website of the Cantonal Tax Office lists the telephone number and e-mail address. The relevant municipal tax office also answers questions about taxes and filing tax returns. If you don’t feel like dealing with taxes, you can have a tax consultant fill out your tax return.
Tax software accepted in the canton of Zurich
The submission of the tax return is possible electronically in every Swiss canton. A tax software is a crucial work relief, but different tax software is accepted in different cantons.
The Canton of Zurich accepts the ZHprivate Tax software, which is available directly online and does not require a download.
It can be accessed via the ZHservices portal. Private Tax software is also accepted, but a download is required. The software can be used on Windows, Mac OS, Linux, but also other operating systems. In order to avoid mistakes when filing their tax returns, taxpayers in the Canton of Zurich can make use of the services of a tax advisor. He answers questions about taxes and can prepare tax returns. If you are well versed in the subject yourself, you can file the tax return online.
Deadlines for filing the tax return in Zurich
In the canton of Zurich, the tax return is always submitted for the previous year and must be received by the cantonal tax office by March 31 of the current year. Thus, a tax return for 2022 must be filed no later than March 31, 2023. Even if the tax return is prepared by a tax advisor, this deadline must be met.
Those who cannot submit their tax return on time by March 31 must apply for an extension of the deadline before it expires. The extension of the deadline must be requested in writing to the relevant municipal tax office. The application should contain the taxpayer’s name, date of birth, home address and e-mail address, registration number and tax period (year). The taxpayer should justify why he/she is unable to file his/her tax return on time.
In some municipalities, the request for an extension of the deadline can also be submitted online. The relevant information is also required for this. A maximum extension of the deadline is possible until November 30.
Consequences of not meeting the deadline or not filing the tax return in Zurich
If the tax return in the Canton of Zurich is not submitted on time and no application for an extension of the deadline has been made, the taxpayer will receive a reminder from the responsible tax office. A reminder fee is not charged. With the first reminder, taxpayers do not yet have to fear any costs or legal consequences.
Fine of up to CHF 10,000 possible in Zurich
The Zurich Tax Office levies a fine if the tax return is not submitted despite a reminder. The amount of the fine is at the discretion of the tax office. The fine may amount to CHF 1,000, but in serious cases up to CHF 10,000. Repeated failure to file a tax return is considered a serious case and is punishable by a correspondingly high fine. According to the tax office, repeated failure to file could constitute a case of tax evasion.
The fine must be paid within 30 days of receipt of the notice. If payment is not made within this period, interest on arrears will be charged. The accrual of interest begins with the expiration of the period of 30 days.
What happens if you do not file a tax return in Zurich?
If a tax return is repeatedly not submitted, the Zurich Tax Office may assess the income tax at its own discretion. Only in the case of an obvious incorrectness does the taxpayer have a chance to succeed in an objection. The objection must be made in writing to the Zurich Tax Office within 30 days of receipt of the notice. The objection must be substantiated and supported by evidence.
An appeal should also be filed against an income tax assessment that is too low, otherwise you could face a penalty for tax evasion. If it subsequently turns out that the dutiful assessment is significantly lower than the assessment based on the actual factors, the taxpayer may be prosecuted for tax evasion. This can be avoided with a reasoned objection.
What evidence must be attached to an objection?
- Various supporting documents must be submitted with the objection to the tax office’s decision:
- Wage statement
- Pension certificates
- Certificates from the unemployment insurance fund, if funds were received
- Interest and dividend credits
- Purchase and sale documents of securities
- Certificates of contributions to pension funds if these are not listed in the salary statement
- Certificates of contributions for insurance
Taxes: possibility of payment by installments in the canton of Zurich
In case of payment difficulties, payment by installments or deferral of taxes is possible in the canton of Zurich. The tax assessment notice shall specify a period within which a written request for payment by installment or deferral may be submitted. Taxpayers must consider the late payment interest consequences when paying in installments or deferrals. In the case of provisional tax invoices, payment by installments is possible in a maximum of 12 monthly installments, and in the case of definitive tax invoices, in a maximum of 6 monthly installments.
In the case of taxpayers at the subsistence level, it is possible to apply for payment in installments for more than 6 monthly installments, even in the case of a final tax assessment. With the request for payment in more than 6 installments, taxpayers must submit a written justification with the calculation of the subsistence minimum. There is no legal entitlement to payment by installments or deferral. It is at the discretion of the cantonal tax office whether an installment payment or deferral is granted.
What is tax-free in the canton of Zurich?
Various revenues are tax-exempt in the Canton of Zurich. This includes a firefighter’s salary for performing the core duties of the fire department. CHF 5,000 can be deducted for direct federal tax and CHF 8,000 for state and municipal taxes. Winnings made in a Swiss casino are tax-free. Up to CHF 1 million, winnings from online and large-scale games are also tax-free, provided such games are licensed in Switzerland.
Up to CHF 1,000, winnings from games of skill and lotteries used for sales promotion are tax-free. Larger profits, but also prizes in kind such as cars, must be taxed in full. This also applies to winnings from games that are not permitted in Switzerland. Scholarships are tax-exempt if their recipient is needy. Support contributions, to which
- Unemployment assistance
- Supplementary benefits
- Aids
- Helplessness allowances
- Care contributions
- Community grants
do not have to be taxed.
What is tax deductible in the canton of Zurich?
Depending on the canton, different expenses can be deducted for tax purposes. In the canton of Zurich, the following costs have a tax-reducing effect:
- Secondary income lump sums as professional expenses
- personal AHV amounts due to early retirement
- Professional expenses for a study
- Home office costs due to Covid 19
- Expenses for applications
- Costs for education and training that the taxpayer had to bear himself
- Costs for external childcare
- permanent vital diet up to CHF 2,500 per year
- disability-related costs as lump sums depending on the degree of disability
- Sickness and accident costs
- Stakes of up to 5 percent, maximum CHF 5,000 per year for winnings from non-tax-exempt cash games
- Stakes on winnings from online games up to CHF 25,000
- Donations to tax-exempt institutions based in Switzerland
- Debt interest up to a maximum of CHF 50,000
- Professional expenses for weekly stay
In addition, property maintenance costs are tax deductible. Construction loan interest on real estate is deductible for state and local taxes.
Self-employed persons can also deduct other expenses for tax purposes, such as provisions and research and development costs.