Vaud Subsequent Ordinary Taxation (TOU) : The tax return for withholding-tax taxpayers

You are required to file a TOU if you meet one of the following criteria for the 2025 tax year (filed in 2026): gross income above CHF 120,000, taxable wealth exceeding CHF 60,000 for a single person and CHF 120,000 for a married couple, receipt of income not subject to withholding tax, complete absence of income, or ownership of real estate located in Switzerland or abroad. In these cases, the return must be submitted to the Vaud tax authorities.

Yes. If you live in the canton of Vaud and are taxed at source, but do not meet the mandatory criteria, you may voluntarily opt for TOU to potentially optimise your tax situation.

For a voluntary TOU request, the deadline is 31 March 2026 for the 2025 tax year. If you are subject to mandatory TOU, it is recommended to submit your tax return as soon as you become aware of this obligation.

The canton of Vaud does not yet offer a highly advanced online process, even though things improve year after year. In 2026, the simplest option remains the PDF form provided by the canton of Vaud. This form allows you to select the relevant year, complete your information, and sign it. A few days or weeks later, you will receive your tax credentials through the 2025 data transmission form.

Yes. For TOU purposes, your entire wealth is taken into account even if some of that wealth is not taxable in Switzerland, as is sometimes the case with real estate. In practice, the CHF 60,000 wealth threshold includes your Swiss and foreign bank accounts, Swiss and foreign investments, and even country-specific financial products such as PEA, PEL, and certain life insurance policies.

Put simply, Swiss withholding tax is calculated exclusively on the basis of your gross salary paid by your employer nothing else is included. This means your wealth, the income from your wealth, annuities, pensions and other elements are not integrated into the calculation, creating a tax imbalance between Swiss nationals (or Permit C holders) and people taxed at source.

TOU therefore aims to place everyone concerned on an equal tax footing. This is why, very often, TOU is not an advantage but a legal obligation which can be costly, even if it allows you to claim certain deductions that are impossible under the strict withholding-tax framework.

This is the most typical situation we see in our fiduciary firm. Foreign clients taxed at source do not submit the form and simply remain taxed at source. This common situation is not ideal.

Two scenarios are possible: either the canton of Vaud will detect it and contact you with a request to file a tax return for the current year and potentially previous years, or you take the initiative as soon as the issue is identified by sending the form as quickly as possible for all relevant years.

In principle, as long as you are the one initiating the regularisation, there will be no negative consequences other than having your tax recalculated as if you had always filed a tax return. However, in some cases, late-payment (default) interest may be charged on the tax due.

If, on the contrary, the amount withheld at source turns out to be higher than the tax due under the ordinary return, the canton of Vaud will reimburse the difference within thirty days of receiving the assessment decision.

If you like playing with fire… we are obliged to tell you it’s not a good idea. Once you meet the criteria defined above, filing through TOU is a legal obligation.

If you still choose not to comply, you expose yourself to a risk of tax evasion. If the tax authorities become aware of the breach, they may require you to file a tax return in order to collect the tax due through a tax recovery procedure. And if they consider your actions deliberate, they may add an administrative fine equal to the tax due for failing to comply with your obligations.

In the worst-case scenario, you may end up paying double.