The first way of saving on tax is by being conscientious. You can take advantage of the various savings tips only if you have collected all the necessary receipts and documentation over the course of the year and provide proof to support your details or deductions. In addition, it is important to keep yourself abreast of developments in tax law. Most savings possibilities are variations on a few ideas and mechanisms. Therefore, it is beneficial to be aware of these examples: choose a tax-free income, stop progressive increases in taxation, avail of savings privileges, exploit special provisions in cantonal tax rules or make use of the lower tariffs available in other cantons or other types of tax.

A few selected tips:

Contributions to private pension plans (pillar 3a)

Contributions to private pension plans (pillar 3a) can be deducted from your taxable income up to a certain amount. When the capital and the income achieved by way of a pension (old-age, invalidity or death) are paid, they are subject to a separate annual tax at a favourable pension rate.

Deductibility of hospital costs

Hospital costs borne by the patient are generally tax-deductible at the state and cantonal level above a specific limit specified by the canton. In most places, the limit set is five percent of the "net income". In order to offset all illness-related costs against tax, it is important to keep all the receipts.

Moving house

If you have a very high income or assets, it might be worthwhile to move house. People pay different rates of tax from one canton to the next and from one town to the next. The Federal Tax Authority's website contains details about the percentage tax burden payable on a particular gross income depending on marital status, number of children, etc. Even if you do not move to another canton until the end of the year, it can still be worth it. You pay income and wealth tax for the whole year in the canton where you are residing at the end of the year.

Buying shares instead of bonds

The advantage of fixed interest securities like bonds is that they yield a regular return. Unfortunately, you have to declare this interest as income. If, on the other hand, you can sell shares for a profit after a certain length of time, the profit that you make is tax-free.

Buying the pension scheme

Check whether you have any scope of buying a pension scheme, which is often possible after a pay rise. By buying it you will top up the difference between your previous insured salary and your new salary. This will help you get a better pension when you retire. This amount can be deducted from your taxable income. Ask your pension scheme providers what your individual cover gap is because the income tax-exempt purchase depends on this gap.

Children paying rent

If parents leave their property to their children free of charge, they are still required to pay tax on the rental value of the property as income. If the property is let out for a rent, the tax is calculated on the agreed rate of rent. Warning – this mechanism does not work the same way in all cantons. To be on the safe side, ask your tax consultant or the tax office.

Further Information

Federal Tax Authority

Tax comparison by comparis

Homegate tax calculator