Time to make your tax declaration in Switzerland? If you have an ongoing loan, do not forget that you can deduct the interest of the loan in your statement, and thus get some interesting tax deductions!
No, it is not necessary to declare your loan to the tax authorities. However, it is strongly recommended because:
Of course, the money obtained from your loan won’t be counted in your annual income. However, the interests related to this loan can be deducted from your tax declaration and thus, lead to a tax deduction.
Suppose you declare a taxable income of 30,000 Chf (income minus deductions, with no declaration of your loan). If you have a personal credit of 50,000 Chf over 4 years, with a 11.9% interest rate, you will pay a total of 13,000 Chf interest, or 3,250 Chf yearly. Those 3,250 Chf can be deducted from your tax declaration and will count as a tax deduction. In this example, declaring your loan will lower your taxable income from 30,000 Chf to 26,750 Chf!
In Switzerland, if you have an ongoing credit with a bank or an agency, you will automatically receive, in January, a paper indicating how much you can deduct from your taxes. Simply attach a copy of this document when you return your tax. If you didn’t receive this document, do not hesitate to ask it to your loan agency as soon as possible!
Written by Multicredit: www.multicredit.ch/en