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Individuals – Income Tax: interest on early payment of tax bills

Even in the realm of taxation, there are opportunities to earn interest, and what's more, it's tax-free. With the generally increased interest rate environment, the topic of interest for early payments of cantonal and municipal taxes by individuals is once again in focus. Several cantons in Switzerland are now reinstating this practice, rewarding those taxpayers who settle their taxes early.

Here are some practical examples:

Canton of Zug: 2% discount for settlement by 31st July 2024 at the latest. Additionally, from 2024 onwards, a positive compensatory interest will also be paid on the difference to any potentially lower final tax liability.
Canton of Zurich: 1% compensation interest for settlement prior to the due date, or 1% compensatory interest if an excess payment was made due to the provisional invoice. The usual deadline is typically 30th September of the tax year.
Canton of Schwyz: 0.75% discount/advance payment interest for settlement before 1st July 2024. The compensatory interest is 1% for excess payments.
Canton of Aarau: 0.75% compensation interest on any payment before 31st October 2024. The compensatory interest is also 0.75%.

Please note, however, that all cantons continue to levy default interest on late payments. Additionally, negative compensatory interest is also applied to the detriment of taxpayers, i.e., on the difference to any potentially higher final tax liability. We strongly recommend adhering to the payment deadlines at least.

For individual consultation or further information, please contact Carmen Hofmann, Mandate Manager, at carmen.hofmann@fineac.ch, or Barbara Bucher, Mandate Manager, at barbara.bucher@fineac.ch.

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Remo Merz, 27.03.2024

Keywords: Fiduciary, taxes, accounting, Fineac