Did you follow our advice and are now an expert on different existing types of income? All you have left to do now is to understand the various deductions authorised and taxation will no longer hold any secrets for you. And of course if you need a hand, feel free to ask us, we can even file your tax return in the canton of Vaud directly if you wish.
Private pension plans: the pillar 3
The best way to lower your taxable income is to open a pillar 3.
Employees can deduct up to 7’056 CHF in 2023 (6,883 CHF for 2022) and self-employed people up to 35’280 CHF for 2023 (34,416 CHF in 2022)!
The canton of Vaud does not cap this category. However, deductible amounts depend on your means of transportation.
You are a sportive person and go to work by bike
You can enjoy a flat-rate deduction of 700 CHF per year.
Example: I go to work by bike, I can deduct 700 CHF from my taxable income (this one is easy).
You are an adventurer and go to work by motorised two-wheeler
You have to calculate: how many kilometres separate you from your home and your workplace * 2 (round-trip) * the number of days you go to work * 0.4
Example: I live 10km away from where I work and I go there on my motorbike. I did not miss a single day of work (max. 240 days of work). Which gives me: 10 * 2 * 240 * 0.4 = 1,920 CHF deductible per year.
You are an environmentalist and go to work in public transportation
You will find below a table determining precisely the amount you can subtract to your taxable income.
How many kilometres separate you from your home and your workplace? Four little kilometres? You can deduct 1,587 CHF from your taxable income per year. 42 kilometres? You can deduct 3,672 CHF. 51 kilometres? 4,080 CHF. 100 kilometres? Same amount, 4,080 CHF (it is the maximal amount).
You are self-employed and go to work by car
If you are like most workers in Switzerland, your morning routine can be summed up as follows: you grab a quick breakfast, a coffee and you turn the key to start your car’s engine.
How many kilometres do you travel yearly to commute from your home to your work?
The first 15,000 kilometres are deducted 0,7 cents per unit, all the remaining ones are deducted 0.35 per unity.
If you travel 10,000 kilometres per year, the calculation will be the following: 0.7 * 10,000 = 7,000 CHF. Generous!
If you travel 20,000 kilometres per year, the calculation will be the following: (0.7 * 15,000) + (0.35 * 5,000) = 10,500 + 1,750 = 12,250 CHF deductible per year.
You are an employee and have to handle your meals? Regardless of whether you make them yourself, you are a huge fan of the local restaurant or that you alternate between Coop and Migros, you can deduct a maximum amount of 3,200 CHF per year.
You are an employee and your nice boss pays for part of your meal (flat-rate per meal or cafeteria with preferential rates for example): you can deduct a maximum of 1,600 CHF per year.
Finally, maybe your super kind boss bares the costs of all your meals? In this case, you cannot deduct anything.
Whether you are self-employed or an employee, you are entitled to deduct the equivalent of 3% of your net salary. However, the minimal deduction will be 2,000 and it is capped at 4,000 CHF per year.
In order for your training to be tax deductible, it must be equivalent or more than the federal maturity level. Maximum deductible: 12,000 CHF per year.
The “double activity of the partner” plan
We all know that getting married, implies paying more taxes. What we are less aware of is the fact that when both partners are in gainful employment, they are entitled to an annual tax deduction of 1,700 CHF for the couple.
In the canton of Vaud, you can deduct a maximal amount of 2,200 CHF per person and per year, 4,400 per couple and an additional 1,300 per child or dependent.
On top of health insurance (62) expenses, you have the possibility to deduct 5% of the total costs in excess of your net income.
To give you an example, if your gross salary is 100,000 CHF, that your net salary is 70,000 CHF and that over the course of this year your medical costs were 5,000 CHF, you will be able to deduct everything above (70,000 CHF x 0.05 = 3,500 CHF). Your deduction will be 1,500 CHF.
Deductions for families
If you have a child/children, you benefit from additional deductions.
For married couples, 1,300 CHF per household + 1,000 CHF per child are deductible from your net income.
For single-parent families, the aid is greater: 2,700 CHF + 1,000 CHF per dependent child.
Provided that you can present the supporting documents, you can deduct up to 7,100 CHF per year and per child or dependent person in need.
The repurchase of your LPP
If you can repurchase part of or your entire pension fund, each franc repurchased will be deducted from your taxable income, with no upper limit.
Just like for the pillar 3, it is important to understand the functioning of the Swiss retirement system before repurchasing.
The mortgage loan
Did you invest in real estate or are you looking into trying it out? Good news! The annual interest on your mortgage debt is entirely deductible from your taxable income.
The deduction for low-income taxpayer
If the income of your household is lower than average, you can ask for a deduction for low incomes.
At this point, you should be able to estimate your taxable income quite precisely.
Do you want to estimate how much taxes you will pay? Go check out our fiscal calculator!