Paying more tax than required is not uncommon in Switzerland’s complex, multi-layered tax system. This can occur due to excessive advance payments, overestimated withholding, or unexpected deductions that reduce your actual tax liability. When this happens, taxpayers naturally want to know whether they can carry forward the overpaid amount to the next tax year instead of requesting a refund. This blog takes a detailed look at the rules, practices, and scenarios related to carrying forward tax overpayments in Switzerland, helping you understand your options and make informed decisions.
What Is a Tax Overpayment?
A tax overpayment occurs when the amount paid to the tax authority—whether through advance payments, withholding at source, or direct transfers—exceeds your final assessed tax liability. This can happen for several reasons:
- You made high advance payments based on overestimated income.
- Your employer over-withheld taxes at source.
- You claimed more deductions than initially expected.
- Your final taxable income was lower than projected.
Once your final tax assessment (Steuerveranlagung) is issued, the tax authority compares the actual tax owed to the amount paid. If you’ve paid too much, a balance in your favor is created — this is your overpayment.
Refund vs. Carry Forward: What Are Your Options?
When an overpayment is identified, you generally have two options:
- Request a refund: Receive the overpaid amount back in your bank account.
- Carry forward the overpayment: Apply the overpaid amount to your next tax year’s prepayments.
By default, most Swiss cantonal tax offices refund the overpaid amount. However, if you prefer to carry it forward to the following year, this is usually possible — but you must notify the tax authority in a timely manner and in writing.
Is It Legal to Carry Forward Overpaid Taxes?
Yes, carrying forward overpayments to the next tax year is allowed in Switzerland, but it is not automatic. You must make a formal request or indicate your preference before the refund is issued. If you do not make such a request, the overpaid amount will typically be refunded to your bank account after the tax assessment is finalized.
Not all cantons handle carry-forward requests the same way, so always check your local tax office’s policy or portal instructions.
When Carrying Forward Makes Sense
There are several strategic and practical reasons to carry forward overpaid taxes:
- Stabilizing cash flow: Helps manage future tax obligations without needing to budget separately.
- High expected income next year: You anticipate a higher tax bill and want to prepay a portion.
- Saving effort: Reduces the number of transactions and paperwork required for refunds and future payments.
- Interest optimization: Although rare, some cantons offer minor interest benefits for carried-forward balances if retained as credit for prepayment.
Steps to Request Carry Forward of Overpayment
Here’s how to ensure your overpaid tax is carried forward instead of refunded:
- Wait for your final tax assessment and determine the overpaid amount.
- Contact your cantonal tax office before they initiate the refund (often within 30 days of the assessment).
- Submit a formal request in writing or via your canton’s tax portal, specifying that the overpayment should be applied to next year’s advance tax.
- Confirm that the credit appears in your taxpayer account for the next tax period.
In some cantons (e.g., Zurich, Vaud), you can log in to the online tax platform and apply the credit forward using a simple checkbox or form field. In others, such as Geneva or Bern, a formal letter or phone confirmation may be required.
Example Scenario
Let’s say you made CHF 25,000 in advance tax payments for the 2024 tax year, but your final tax assessment shows a liability of only CHF 22,000. You’ve overpaid CHF 3,000. If you don’t take any action, the tax office will usually refund CHF 3,000 to your bank account.
However, if you expect a significantly higher income in 2025 due to a job promotion, you can request that the CHF 3,000 be carried forward and used as part of your 2025 advance payments. This means less cash outlay when prepaying 2025 taxes.
Can You Carry Forward for Multiple Years?
Technically, yes — an overpayment can be carried forward more than one year, but this is less common and may raise flags at the tax office. Some cantons allow it with special requests, while others apply unused balances automatically to the next open liability period. If not claimed or used within a few years, the tax office may contact you to either use the credit or refund it.
Important Considerations
- Timely communication is key: Notify the tax office before the refund is processed.
- Bank account updates: If you change your bank account and want a refund, be sure to update your details promptly to avoid failed transfers.
- Tax software updates: Use e-filing portals to track payments and credits accurately.
- No interest on credits: Most cantons do not pay interest on overpaid taxes unless specific prepayment interest applies, so long-term credit balances do not earn returns.
What If the Carry Forward Is Not Reflected?
If you requested a carry forward but your next tax prepayment statement does not reflect the credit, contact your tax office immediately. Provide proof of your request (email or portal submission) and request an adjustment before making any new payments.
Conclusion
Carrying forward tax overpayments to the next year is a practical and legal option for managing your Swiss tax obligations. While the default process favors issuing refunds, proactive taxpayers can request to retain the balance as credit toward future liabilities. This approach can support better financial planning, reduce paperwork, and streamline your tax management — as long as you notify your canton’s tax authority within the appropriate window. Always check cantonal guidelines for the exact procedure and stay on top of your assessments to use your tax credits wisely.
