Worldwide, this form of taxation is being debated and many countries have decided not to tax the capital saved by their taxpayers. Bad luck for the residents of Valais and more generally for the Swiss people as this tax remains applicable in Switzerland.
Along with communal, cantonal and direct federal income taxes, you will be required to declare your assets and debts in order to be fiscally compliant. By the way, if you need a hand with your tax return in Valais, feel free to ask! 😉
What is considered as wealth in the Valais?
Before diving into the “net worth” concept, I suggest clarifying together what is considered by the relevant tax authorities as an inherent part of your wealth:
Your movable assets :
These are any assets that are not immobilized, in other words all except real estate (houses, buildings, and lands of any kind). It includes:
- Bank accounts
- Securities (stocks, bonds)
- Valuable objects
- Life insurance
- And even doubtful receivables as long as you still have a chance to recover the money.
Are excluded from this list the household furniture and the personal items of common use.
Real estate assets
No surprise, if livestock and watches are part of our taxable wealth then so is our real estate.
Please note that when talking about real estate assets, it is important to differentiate the rents that will be taxed as taxable income from the fiscal value of the real estate which will be taxed as wealth.
Identify your taxable wealth in Valais
Once this aggregation exercise is completed and the total value of your assets is known, you will be allowed to deduct all the debts (credits and mortgages) for which you are paying interest.
Besides the deductible debts, the canton of Valais allows a lump-sum deduction not to tax the assets from the first franc. This allowance is determined by your situation:
- For single, widowed or divorced persons without children: CHF 30’000.
- For married couples (with or without children) and single persons living in a common household with a dependent child: CHF 60,000.
Now you can claim to know how to calculate your taxable wealth. Quite fancy, isn’t it?
The cantonal wealth tax in the Valais
Similarly to income and to other Swiss cantons, Valais taxes wealth first through the canton and then a further through the commune of residence. There are two layers.
In this first step, the objective is to determine the cantonal tax. To do so, we need to refer to the scale commonly known as: Scale 3 – Table 3 Cantonal and communal tax on individual’s wealth
This scale will help you to fairly easily determine the amount of tax to pay based on the aggregated value of your assets.
Rates range from 1% for taxable assets up to CHF 10’000 to 3% for assets exceeding CHF 2’000’000.
Let’s take an example and say that I am a single person with a bank account at the BCVS that shows a pretty nice balance of CHF 60’000.
I will initially deduct my lump sum of CHF 30’000 to determine my taxable wealth and then rely on the scale to calculate the final cantonal tax.
In my situation, it is rather easy: 60’000 – 30’000 = 30’000… As my taxable wealth of 30’000 CHF has been determined, I will consult this famous scale.
I would therefore owe 39 CHF to the canton of Valais. Now you can determine your taxable wealth and the resulting cantonal tax!
The communal wealth tax
I should warn you, it’s not as straightforward as for the canton. However, if you have already figured out the municipal income tax, then everything should be fine. The logic is very similar.
Let’s not start from scratch. Whatever was valid for the canton remains applicable to the commune.
The first step is already done: you calculate your taxable wealth and then look up the corresponding amount of tax in the scale. In our example, 39 CHF.
Then comes the commune in a second step. In Valais, each commune sets a tax coefficient, to be multiplied by the amount taxed by the canton.
These coefficients range from 1 (no increase, the cantonal tax is equal to the communal tax) up to 1.5 for the communes where it is not advisable to settle (fiscally speaking, obviously).
If in our example I reside in Fully then I will have to multiply my 39 CHF by 1.25 which will give me an additional 48.75 CHF to pay to the commune of Fully.
All in all, I will owe 39 CHF to the canton and 48.75 CHF to the commune. This brings the total wealth tax to 87.75 CHF.
Well, now you have a detailed overview of how to calculate your taxes in Valais, but of course do not hesitate to contact us if you need a customized assistance!