Hello hello,
Would you like to pay less tax?
When you fill in your tax return in Switzerland, it’s a real nightmare. You never really know if you’ve filled it in correctly?
Admit it, you’d like to reduce that bill that’s not going to do your wallet any good?
Then you’ve come to the right place!
When filling out your Swiss tax return, it’s important to take advantage of all possible tax deductions. Tax deductions allow you to reduce your taxable income, and therefore your tax bill. So it’s essential to reduce it as much as you can.
In this article, I’m going to take you step-by-step through all the possible deductions for your tax return, whether you’re a student, an employee, a parent or even a homeowner, you’ll find information that applies to you. Who knows, maybe you’ll find tax deductions that you weren’t using before, that will help you reduce your taxes.
For those who prefer illustrated video content, click here 👈
3-2-1, let’s goooooo!
First of all, you should be aware that the maximum and minimum amounts for each tax deduction may change from canton to canton. In addition, deductions may differ at federal and cantonal level, since both have different maximum deductions.
First, let’s take a look at the deductions that will interest most of you.
Travel expenses
This is a tax deduction for which almost everyone is eligible, since it covers expenses incurred when commuting to work for employed people, or to school or university for students. These travel expenses can be of different types. Here I’ll use the example of an employee, but it’s the same for students.
Firstly, if you travel to work by car or motorcycle, you can deduct the kilometers traveled between your home and your place of work. If you work full-time, you can deduct a maximum of 220 times the round-trip distance between your home and your place of work. Of course, you’ll need to justify the use of a car – it could be that the place where you live is poorly served, that you save more than an hour by using the car compared to if you went to work by public transport, and so on.
If you take public transport to work, you can deduct the cost of your public transport pass. Note that the tax office will only recognize the lowest costs. Here’s how it works. If you take the train to work, and the price of the zone pass is cheaper than the general pass, the zone pass will be taken into account. Even if you had taken the general pass.
Finally, you can also deduct a flat-rate fee for your bicycle or motorcycle with a yellow plate if you use this means of transport to get to work.
Note that most cantons allow you to deduct both public transport and bicycles if you do both.
Each canton has a different maximum for this deduction. But it’s very important, as it can easily reduce your taxable income by several thousand Swiss francs.
Meal expenses
If you can’t get home for lunch, you can also deduct meal expenses. This is the case, for example, when the distance between home and work is long, working hours are irregular, the lunch break is too short or transport links are poor. For the cantons of Fribourg and Neuchâtel, the deduction amounts to CHF 15 for each lunch, up to a maximum of CHF 3,200 per year. And if you have access to a reduced-price canteen or if your employer contributes to your meals, you can only deduct CHF 7.50 per meal.
A little tip: if you work part-time, it’s perfectly possible to split your 60-80% into 5 days a week, and thus deduct 5 meals a week 😉
Note that there is a limit at federal and cantonal level for this deduction of meal expenses. But it’s a deduction not to be overlooked, as it also allows you to deduct several thousand Swiss francs from your taxable income.
Additional costs when staying away from home
In addition, if you stay at your place of work during the week, you can also deduct the cost of evening meals, which will be CHF 30 per day instead of CHF 15, or CHF 22.50 (if you have access to a reduced-price lunch), or a maximum of CHF 6,400 per year if the circumstances exist all year round.
If you are staying at your place of work, you can still deduct the rent for a room, in line with the usual rents at your place of residence, and you will need to enclose a copy of the lease contract. You will also be able to deduct the cost of commuting to and from work twice a week, so don’t forget this.
Other business expenses
Other deductions not to be forgotten are work-related expenses. These include work clothes, equipment, software, books, courses and so on. You can benefit from a flat-rate deduction amounting to 3% of your net salary, with a minimum of CHF 2,000 and a maximum of CHF 4,000 per year. Of course, if you have higher costs, you can choose to deduct the actual costs, but be sure to include all supporting documents.
Please note that expenses incurred for voluntary teleworking should also be included in this section. You can deduct the cost of equipment for working from home if your employer does not provide it (office equipment, computer, printer, etc.). What’s more, some cantons allow you to deduct the cost of renting a room in your apartment or house if you use it solely for telecommuting.
No additional deductions are allowed for telecommuting, at least not in the canton of Fribourg.
Expenses for secondary activity
If you have a secondary salaried activity, e.g. you work in a restaurant on weekends, in addition to your main activity, you can deduct as professional expenses 20% of the net secondary income, minimum CHF 800 (but maximum the amount of the net secondary income if it is less than CHF 800) and maximum CHF 2,400 per year.
Training and continuing education expenses
Another possible deduction is for training and further training costs. There is no longer a requirement for an intrinsic link between the expenses incurred and the gainful activity carried out (great if you want to change jobs). Training costs are therefore more easily deductible. These may include training courses, paid training on LinkedIn or other online platforms, training at a school, language courses, and so on.
Please note that only amounts actually incurred can be deducted, up to a maximum of CHF 12,000 for the canton of Fribourg.
Excluded, of course, are training courses paid for by your company (although it’s a good thing they pay for them, if you’re working for them ;)).
In some cantons, such as Zurich, it is possible to deduct certain training courses without proof. Other cantons probably allow you to do so, but unfortunately I don’t have any more information.
Health and accident insurance premiums
Another interesting tax deduction is the deduction of health and accident insurance premiums.
Since health insurance is compulsory in Switzerland, and premiums are rising every year, it’s always hard on the wallet. So we don’t hesitate to deduct these out-of-pocket expenses from our taxable income.
In the canton of Fribourg, it is possible to deduct CHF 4810 per year for a single, separated, divorced or widowed person, CHF 9620 per year for spouses, CHF 4210 per year for each young adult in training at the end of the year, from the age of 18 until the age of 25, and CHF 1140 per year for each dependent child under the age of 18 at the end of the year 2023.
Medical expenses
Health insurance also means medical expenses.
If you have high medical expenses, you can deduct part of them from your taxable income. We’re talking about doctors, dentists, prescription drugs, prescribed care, glasses and contact lenses. Anything that isn’t reimbursed can be deducted (you know, that 10%, 30% or even 100% depending on the case). But beware: in most cantons, you can only deduct expenses that exceed 5% of your net income. Consequently, if your expenses are less than this 5%, you won’t be able to deduct anything. Unfortunately, this is the case for most people.
3rd pillar a contributions
The most important tax deduction! Your contributions to the 3rd pillar a, whether bank or insurance.
If you’ve been following my channel, you’ve probably already heard of the 3rd pillar as a way of investing for your retirement, before investing in the stock market or crypto. And with good reason: each year, you can contribute up to a certain amount – CHF 7,056 for 2024 – per salaried member of your household. So if you’re in a household with one person, it makes sense to contribute both if you can.
As this CHF 7,056 is fully deductible, it makes a difference to your taxable income.
And if you’re self-employed, you can pay up to 20% of your net income into the third pillar, up to a maximum of CHF 35,280 for the year 2024.
Of course, if you don’t have a 3rd pillar yet, I can only encourage you to read my blog post about 3rd pillars, or my YouTube video about them.
It’s important that you choose the best possible 3rd pillar.
What’s more, if you’re young, between 20 and 35, it might be worth investing your 3rd pillar in the stock market, something you can do with VIAC, frankly, Finpension or Yuh, whose promo codes you can find on my promo code page, each giving you a significant advantage over opening an account without my codes.
The great thing about these 3rd pillars is that you can decide your allocation between risky assets like equities, and less risky assets like bonds, depending on your risk profile. Investing your 3rd pillar bank account in the stock market gives you good returns.
The reason I find this deduction incredible is that, in addition to encouraging you to invest for your retirement, the amount invested is not counted as part of your wealth, so you don’t have to pay wealth tax on it for all your contribution years, and what’s more, the amount invested each year reduces your taxable income and therefore lowers your tax bill. Conversely, other tax deductions allow you to deduct the money you’ve spent.
3rd pillar b contributions
In some cantons, such as Geneva and Fribourg, you can deduct your 3rd pillar b contributions. The maximum deductions are CHF 1,500 for married people living in the same household and CHF 750 for other taxpayers. Personally, I don’t have a 3rd pillar b, but if you want to know whether it would be worthwhile to have one in your case, don’t hesitate to check with independent financial advisors like Hoxy, whose contacts you can find here. Don’t hesitate to tell them that you heard about them on my blog, as this could potentially lead to further savings for you.
2nd pillar contributions (AKA 2nd pillar buyback)
Now that we’ve covered the 3rd pillar, let’s move on to the 2nd pillar.
Yes, you can also benefit from a tax deduction for the money you voluntarily contribute to the second pillar. Of course, I’m talking here about an additional contribution to the 2nd pillar, not at all the 1st BVG amount shown on your annual salary certificate (that’s the 2nd ;)).
Unlike the 3rd pillar, whose maximum amount is set by the Swiss Confederation, the amount you can contribute to the 2nd pillar depends on your contribution history. To find out, simply ask your 2nd pillar provider how much you can contribute. This can be a substantial amount, and if you decide to make what’s known as a “2nd pillar buy-back”, i.e. an additional payment into the 2nd pillar to make up for any gaps in your contributions, this will enable you to benefit from huge tax deductions.
But you need to think carefully before making this purchase. It’s only worthwhile if you have a good 2nd pillar with good returns. If you have a yield of 1-2%, I’d give up and invest my marbles instead in a 3rd pillar and ETFs with the Yuh or Swissquote platforms, giving me an annual yield of 6-8%.
You also need to make sure you’re eligible for a tax deduction. Please note that if you have withdrawn money from your second pillar to buy a house or start your own business, your additional contributions will not be tax deductible until you have repaid what you have withdrawn. So if that’s the case for you, skip it and go straight to 3rd pillar investments and the stock market.
Now, if you’ve never touched your 2nd pillar and would like to make a purchase, 2nd pillar contributions are an interesting way of reducing your taxes and investing for your retirement while not being taxed on your wealth. Just bear in mind that 2nd pillar returns are very low.
Debt deductions
If you have debts, you can deduct the value of your debts from your taxable net assets. Depending on the amount, this can make a big difference to your net worth.
And if you have debts and pay interest on them, you can benefit from a tax deduction for this interest.
If you have a consumer loan or mortgage, you can deduct all your interest payments. The same applies to credit card debt.
Interest payments on leases, on the other hand, are not tax-deductible, since you don’t own the object.
Deductions for donations
If you make a donation to a charity or non-profit organization, you can obtain a tax deduction for the amount of the donation, provided that the total donation is at least CHF 100. In this case, it’s very important to keep the non-profit organization’s donation certificates, so that you can deduct them on your tax return. If by chance you have made a payment without ever having a certificate, send an e-mail to the organization so that it can send you one. At federal level, you can deduct up to 20% of your net income. At cantonal level, it will vary from 10% to 20%. As you can see, if you’re a generous donor, it can also benefit you in terms of tax.
Childcare expenses
Let’s move on to deductions for families, starting with childcare expenses.
These costs are deductible from your taxable income.
The maximum deduction is CHF 12,000 per child in the canton of Fribourg. This deduction can be claimed for each child under the age of 14, provided that the childcare costs can be proven.
At federal level, the maximum tax deduction is CHF 25,000. Note that the deduction is granted provided that both spouses are gainfully employed. When one spouse is gainfully employed and the other is in training or receiving an invalidity pension, or when both spouses are in training, the deduction may be granted. On the other hand, cantons will not accept deductions for childcare if one of the spouses is not working, assuming that the non-working spouse can look after the children.
Deductions for couples
There are also tax deductions for couples.
Because being a couple isn’t always easy. So the state wants to support you/them as much as it can 😉 No, I’m joking!
If your partner doesn’t work, you can deduct CHF 2,600 from your taxable income.
Conversely, if your spouse works, you can benefit from a tax deduction for double income. This is 50% of the lower income, with a minimum of CHF 8,100 and a maximum of CHF 13,400.
Deductions for financial dependents
If you have children or disabled dependants, at federal level you can claim up to CHF 6,600 per dependant. At cantonal level, it varies greatly from one canton to another.
Deductions for dependants unable to support themselves
This deduction is CHF 5,000 for each dependent. These are people who are unable to provide for themselves, and whose maintenance costs are borne by the taxpayer to the tune of at least CHF 6,500 a year.
Family allowances
If you’re divorced and paying alimony to your ex-partner, you can deduct this from your taxable income.
Securities administration fees and lottery winnings
Now we come to the most important deductions for anyone with assets: asset management fees.
More specifically, these include fees for your current and savings accounts, custody fees, safe-deposit box charges and negative interest rate charges.
In most cantons, you can choose between deducting the actual fees or a flat rate. The flat rate is often a value per thousand of your net assets. It is often higher than the actual costs, so it’s easier and more advantageous to deduct the flat rate.
Building maintenance costs
On to the homeowners! First of all, deductions for home renovations.
If you carry out renovation work on your home, e.g. renovate your kitchen, remodel your bathroom, switch to electric heating, etc., you can benefit from tax deductions.
But be aware that you can’t deduct everything, depending on the purpose of the work.
If the renovations increase the value of the house, you can’t deduct them from your taxable income. This could mean redoing your terrace, building a swimming pool, etc. On the other hand, if the renovations increase the home’s energy efficiency, you can deduct them from your taxable income. This could mean re-insulating your home, switching to a heat pump, or installing solar panels on your roof.
Generally speaking, renovations that don’t increase the value of your home can be deducted.
Note that if you’re planning a major renovation, it can be highly advantageous to spread the cost over several years. Since taxes are progressive, you can save more money over 2-3 years than over a single year.
Depending on your canton of residence, you may also be able to deduct other housing-related expenses from your taxable income, such as building insurance premiums, which are deductible in most cantons. You’ll need to add these expenses to the cost of renovating your home. You can choose between a flat-rate deduction and an actual tax deduction. If you don’t have much renovation work to do, it’s a good idea to opt for the flat-rate deduction, which is likely to be higher.
Rental value of property
Another deduction for homeowners is the rental value of the property.
If you own and live in your house or apartment, you pay taxes on the rental value of your home, which is considered income when it isn’t. In fact, you’ll pay taxes as if you were renting it, and this income that you don’t receive will be added to your income. In fact, you’ll pay taxes as if you were renting it, and this income that you don’t receive will be added to your taxable income. This can considerably increase your taxes.
So how do you reduce this rental value?
Well, there’s only one way to reduce it: invoke the under-utilization of the house.
Basically, if you have a room in your house that you don’t use, you can say that you don’t use that room and ask that it be removed from the rental value calculation. This can really make a big difference in the rental value, which will be reflected in your taxable income.
Withholding tax
If you’ve paid tax at source, it’s very important to declare it. These withholdings will be taken into account when calculating the tax you have already paid. They therefore reduce the taxes you still have to pay. Income on which you pay withholding tax includes dividend payments, annuities and pensions, and lottery winnings. If you invest in US equities or ETFs, via US platforms such as Interactiv Brokers, you can even deduct the withholding tax deducted by the US tax office.
So, as you’ve seen, there are plenty of tax deduction possibilities. Some tax deductions are really advantageous and free, such as second and third pillar contributions. Some deductions for actual expenses can be advantageous as flat-rate deductions, so it’s worth doing your little calculations.
The most important thing when filling in your tax return is to make sure you don’t forget any deductions, because once you’ve sent in your tax return, it’s too late. So make sure you’ve deducted everything you can!
And now, all that’s left for me to do is to wish you a wonderful day, and…
To your tax savings!
