3rd pillar - taxed at source

Finance, Taxes, Banking, Insurance and Retirement
1
Hi all,

I fully paid in my pillar 3 last year and I am a permit B holder to whom withholding tax (Quellensteuer) applies (~95k CHF per year).

As of 2022, it is only possible to get a tax reduction for pillar 3, if I do a full tax return. However, this would expose me to a higher % tax from the municipal as I live in Zurich and the % from the withholding tax is lower.

>> Is it still worth it to do a full tax return or will I end up with less money in the end? This situation should apply to many, so maybe you can help and I do not have to go to a tax consultant

Best,

Philipp

2
There were multiple questions similar to this one in these couple of weeks, worth looking at past messages about taxes.

If the tax situation is basic (e.g. no foreign real estate) I think that you can get a decent approximation by computing the taxable income as net salary plus stock dividends minus all the deductions that you are planning to make, compute your wealth - and see what your cantonal tax calculator says for those 2 numbers

But since you are living in Zurich Stadt, based on my personal anecdotal experience, unless you have some major unusual deduction card up your sleeve that you can play - I do believe that you will be paying more if you do a tax return, even with 3rd pillar.

3
False. You need to submit Antrag auf Neuveranlagung der Quellensteuer, it's a lightweight process exactly to handle such deductions

As such a low earner you probably don't have a *right* to do full ordinary tax return anyway

4
@kerneltrick: Unfortunately the process changes this year - last year I did the light process of the Neuveranlagung. https://www.ubs.com/ch/de/help/pensi...lding-tax.html

@rezak: Thanks, will try

5

I calculated it and it seems also when deducting the 6.8k from S3a I end up paying 0.5k more. So I think the best thing is to just not file.

Thanks

6
Did you apply also other standard deductions? Commute within Zurich is ~700 chf minimum, lunch is ~3.2k, professional expenses default to 3% of salary up to 4k max, etc.

7
Hello,

Sometimes it could be that also with a 3A pillar payment (deductible) the taxes paid at source might be lower than taxes after filing a full tax declaration. (Means: the tax bill as normal tax declarer could be higher.)

8
I applied twice for the neuveranlagung, and in those times they used a lumpsum of 10% of the total income to calculate work related costs. So, with 95k income, they assume work costs of 9500. Living and working in Zurich is quite hard to come to this value.

I think that it is indeed better to not do anything. The question is then, will you keep saving in 3rd Pillar then?