I’ve been planning to write this article for several months now, but I was waiting to receive my final tax notice so that I would have all the information I needed to write quality, real content without assumptions.
I spent a lot of time to fine-tune my tax declaration in order to be sure to pay as little as possible! Indeed, even with the software made available by the cantons, like Fritax for Fribourg, VaudTax for Vaud, they will not ask you all the necessary questions in order to make you save taxes. It is up to you alone to know what you can deduct in order to reduce the total amount of tax due.
Important information : this post is intended for people who have to declare taxes in Switzerland. In my case, the numbers and examples given are applicable to Fribourg and certainly to the majority of cantons, but it is possible to have differences depending on your canton of residence.
Since I started this blog, I’ve been asked a lot of questions about taxes. I’ve noticed in the discussions, several interesting points:
- A large majority hate filling out their declaration and botch the task.
- Most do not know what tax deductions they are eligible for.
- Too many people entrust this task to an “expert” in the belief that it will be the best possible declaration –> Wrong for several reasons !
- # 1 – It is not frugal, because paying 200.00 CHF for a simple task that would take you 1 hour is useless
- # 2 – The expert is often paid per declaration (lump sum), he will not spend 6 hours optimizing it
- # 3 – You don’t learn anything and you repeat this bad routine every year
The #1 might be interesting to do once, especially if you are self-employed, or have just bought real estate or other investments. Afterwards, do it yourself and look for information on your own.
Personally, I love doing my tax declaration! Strange, isn’t it? Well, no, because with the software provided by your canton, you take the data from the previous year and you only have to change the values! Time of the operation: 30 minutes.
Of course, I spend more than 30 minutes finalizing my tax declaration, because once the numbers are updated, I get down to the most important task: tax deductions and optimization!
The important thing to remember is that the deductions can be different depending on the canton in which you live. It is up to you to do your own research. The table of my deductions represents the real deductions I have entered and that I have been allowed for the 2020 tax!
The list of what I deducted from my Swiss taxes in 2020
| Mr. GP’s deduction | Amount [CHF] | Comments |
| Transportation costs | -3’696 | limited to 3’000 CHF for the IFD (Impôt Fédéral Direct). In my case, I live very close to work, so 2 trips of 12 km, 220 days which is the maximum allowed |
| Meals / Stays away from home | -3’200 | 15.00 CHF per meal, but maximum 3’200.00 CHF |
| Other professional expenses | -2’961 | You are authorized to deduct at least 3% of your net salary (flat rate), but at least CHF 2’000.00 and at most CHF 4’000.00. If you have real expenses that are higher than the lump sum, you will have to attach a detailed account with proof of purchase. On the other hand, you can mention, for example, that you don’t have an invoice, because you bought it from second hand, from a private person 🙂 Sometimes this is accepted. |
| Health and accident insurance | -4’900 | So here, it was 4’380.- CHF a single person + 1’040.- CHF per supported child (under 18 years old). As we are not married, the child is shared 50% with me and 50% with Mrs GP. A total of 4’900.00 CHF of lump sum deduction. |
| Premiums for tied pension plan 3a | -6’826 | Max allowed in 2020. + 60 deductible on 2021 🙂 |
| Capital Interest Deduction | -30 | This amount depends on your funds, but it is limited to 150 CHF if you are single and 300 CHF if you are married. |
| Private debts | -12’285 | Matches the amount of annual interest on my mortgage debt. Note that this does not cover the amount of the “virtual” rental value which is higher than this amount 🙁 |
| Private property expenses | -5’895 | One of my favorite sections! Few people know this, but it is possible to deduct maintenance costs related to real estate. Two possibilities: – Lump sum (FF) -> 10% of the gross yield for buildings constructed before 31.12.2010 and 20% for more recent constructions – Effective amount (EA) -> you deduct your real expenses, under certain conditions. The easiest way is to consult this document (for Fribourg, in french) : Déduction des frais d’immeubles -> I give more details below 😉 |
| Training and development costs | -29 | Nothing special here. I had purchased an online course. |
| Medical and dental expenses, etc. | 0 | I could not deduct anything in this section because I only had one session at the physio for 120 CHF. Deductions are granted as soon as the amount of the expenses exceeds 5% of the net income. For example, if your net income is 60’000.- CHF, the first 3’000.- CHF are not deductible. |
| Volunteer payments | -300 | I made a donation to the Red Cross. The total amount is deductible. Minimum 100 CHF/year and maximum 20 % of net income. |
| Social deductions for children | -3’600 | Thank to Baby GP. The child is declared on each of our tax declarations (50/50). Living in partnership, the deduction for health insurance, social deduction and childcare costs are granted at 50% for each parent. On the other hand, the tax rate reduction applies only to one person, the one earning the highest income. This amount is expected to increase next year, as we had no childcare costs in 2020. |
| Total deductions | -43’722 |
Private property expenses
This section is probably the most misunderstood and the most interesting for homeowners. Here is what I thought about deducting in 2020. (sorry for english readers, I only have the french version 🙂
Because this paper is in french, I tried a translation of these 7 elements:
- N° 1 : ECAB (building insurance)
- N° 2 : Real estate contribution to the commune (place where I live).
- N° 3 : Payment into the renovation fund. My apartment is member of a PPE (propriété par étage)
- N° 4 : Maintenance of the heating system
- N° 5 : Maintenance subscription for the elevator
- N° 6 : Painting in common areas (corridors, cellars, stairs). Executed by the co-owners
- N° 7 : Installation of mosquito nets
We note that the work or expenses must be allocated to categories. Some categories are deductible, while others are not.
- In value-added -> not deductible
- housekeeping -> deductible
- In energy saving -> deductible
- Other expenses -> not deductible
The document ” Déduction des frais d’immeubles” contains all the necessary explanations on this subject. There is a very precise explanation of what is deductible and what is not:
Costs incurred to maintain the value of the property are deductible from income. On the other hand, the costs of investments which bring an increase in value and other costs are not deductible.
In my case, I just had a remark and a readjustment concerning the annual maintenance of the heating which can only be admitted as 1/3 as maintenance. For example, the installation of mosquito protection is only an added value and therefore cannot be deducted.
As I reread the document in detail, I noticed that there were still elements that I could deduct such as:
- Water treatment
- All insurance costs. I put the ECAB, but I probably still have some insurance to deduct 🙂
- Janitor fees
- Management fees (for example if you are in a PPE)
- Purchase and installation costs of a water softener + maintenance costs ? Purchase of salt ?
In conclusion, as you can understand, by digging a little and by making the effort to think about all your expenses, you can quickly arrive at quite significant amounts to deduct. If you are not sure if you can deduct something, don’t hesitate to put it on your tax form which will be corrected by the tax auditors.
And you ?
Personally, I’m already excited to do my next tax declaration, as I’ll be able to deduct Baby GP’s childcare expenses and also some of the additional expenses I just listed above.
This subject is really interesting and allows you to really deduct your taxes! Even if the legislation can vary from one canton to another, the concept remains the same! I would be very interested to know if you know of other possible deductions! Don’t hesitate to share them in comments!
