This article will only address one aspect of the taxes in Valais, namely the cantonal taxes. This is one among three layers of income tax you will have to pay. To understand and calculate the cantonal and municipal taxes (ICC), it is necessary to understand how the Valais communal taxes work and then finish with the calculation of the federal taxes (IFD).
Only once these three levels of taxation are added up will you know the final bill.
Of course if you need any help with your tax return in the Valais, we will be happy to assist you.
Cantonal income tax in one step
Admit that when you saw the title you felt relieved? Well, so did we! For once, things are simple.
One scale, one taxable income and all this resulting in one tax. Just what are the people looking for?
To find out the amount that the canton will require from you, you simply have to consult a scale named « Hilfstabellen für die Berechnung der Einkommens- und Vermögenssteuer der natürlichen Personen » also known as « Auxiliary tables for the calculation of personal income and wealth tax “. The preview is available below.
Let’s consider my personal case. If, after deducting the social contributions and after having carefully recorded all the authorized deductions, I end up with a taxable income (ICC) of CHF 70’000. I should settle a cantonal tax of 5’342 CHF. Rather simple, isn’t it?
How a marriage affects cantonal income taxes?
Perhaps you have already met your soul mate or maybe not yet? In any case, it seems relevant to us to investigate the case of a union on the amount of taxes to pay.
Here is where the term ” allowance ” enters the equation. It is a lump sum that the spouses are entitled to deduct from their income taxes.
As a married taxpayer, you can reduce the amount of tax you would have been charged if you were single by 35%. However, this deduction cannot fall below CHF 650 nor exceed CHF 4’680.
In other words, you would assume the tax you would have paid as single person, adding up the incomes and deductions of the entire household, and then subtract 35% of that amount. If the subtracted amount falls within the CHF [650; 4’680] interval, then it must be kept. Otherwise, either if it is lower than CHF 650 or higher than CHF 4’680, you will be bounded by the nearest threshold.
Let’s illustrate this with a couple of examples.
Married couple with a taxable income of CHF 70’000
As single person with the same income, you would have to contribute CHF 5’342 to the canton, but as you are married you can deduct 35% of this amount, i.e., CHF 1’869.70. As this amount is between 650 CHF and 4’680 CHF it will be recognized as such.
Therefore, the final cantonal tax you will pay is CHF 3’472.30.
Married couple with a taxable income of CHF 150’000
The same applies, we need to step in the shoes of a single individual whose income amounts to CHF 150’000. In this specific case, the tax would have been CHF 19’710.15. 35% from this amount represents CHF 6’898.60, which exceeds the upper threshold of CHF 4’680. The deducted amount that will be ultimately retained by the cantonal tax administration is thus 4’680 CHF, for a final taxation of CHF 12’811.55.
The tax allowance in general terms
Now it is clear to us, our allowance is bounded by a lower threshold of CHF 650, and an upper one of CHF 4’680. Here, we will look the other way around in order to define the taxable income boundaries corresponding to these allowances.
The minimum allowance of CHF 650
We need to figure out what amount of tax multiplied by 35% gives 650 CHF; and this amount is CHF 1’857.15. Then we determine which taxable income implies a tax of CHF 1’857.15; and this is CHF 38’200.
As a conclusion, if the household income lies within the CHF 0 and CHF 38’200 range, you will be able to benefit from a CHF 650 allowance.
The maximal allowance of CHF 4’860
Same process, but different threshold. Let’s find out the amount of tax multiplied by 35% giving CHF 4’680 CHF, then which taxable income is associated to this taxed amount. 35% of CHF 13’371.40 gives in the upper bond of CHF 4’680, which is as well the taxed amount for one with a taxable income of CHF 117’900.
So, as soon as your taxable income reaches or exceeds CHF 117’900, you will be allowed to deduct CHF 4’860 from your taxes.
The standard allowance: 35%
No need for reversed calculations anymore. As we concluded that any taxable income lower than CHF 38’201 will benefit from CHF 650 allowance; and any taxable income greater than CHF 117’900 will be bounded to a maximum deduction of CHF 4’680, we know that within this range you will be able to deduct 35% of the taxed amount by the canton.
How children affect your tax burden
Having a dependent child gives you the same tax rights as being married. In other words, if you have a depending child, you will be entitled to deduct from your taxes the – now crystal clear – deduction illustrated in the previous paragraph, as well as to claim a tax saving of 300 CHF per child.
Let’s look in more detail at the impacts for a single person with one dependent child and then the impacts for a married couple.
The impact of children if you are not married.
Even if this means that you are not or no longer married, you will still be entitled to keep (or register) the tax reduction linked to this allowance and to add to this a CHF 300 reduction per child.
The impact of children if you are married.
I must announce that your child will not be associated with a significant tax gain and fortunately, this is not what they are meant for. As you are already entitled to a tax allowance with your marriage, you will only be able to claim a reduction of CHF 300 per child, on your tax burden.
Calculate your global taxes in the Valais: ICC + IFD
Keep in mind this chapter only covers the cantonal taxes. In order to get your final tax burden, you still must add the municipal and federal direct taxes!
And then, you think you are done with taxes in Valais? Well, no… We still have to study wealth taxes in the canton of Valais.
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