From the year 2024, some cantons will increase their interest rates on tax prepayments and tax refunds. Until now, the topic has not been particularly interesting in an environment of low interest rates. However, as interest rates are rising, it is worth taking a look at the question of when taxes that are due anyway should be paid in order to avoid interest payments to the tax authorities.

The tax bill is usually due in the current year, regardless of when the tax return is submitted.

What interest is charged on taxes?

There are basically three types of interest in connection with the tax bill.

Interest on late payment

Both at federal and cantonal level, interest on late payments is charged once the payment deadline has expired. This is charged on tax claims if the final invoice is not paid within 30 days.

Balancing interest

The majority of cantons also apply the so-called balancing interest. This can be positive or negative. Here is an example: Let’s assume the provisional tax bill for the current year is CHF 10,000. You pay the bill on the due date. However, if the final tax bill is only CHF 8,000, the difference will accrue interest in your favour from the due date until you receive the final tax bill. If the final tax bill is higher, for example CHF 12,000, interest will be charged on the difference in your favour.

Interest on refunds

The time of receipt of the provisional tax invoice varies from municipality to municipality. Some send the provisional tax invoice as early as January, while others do not do so until June. However, it is possible to pay the approximate tax amount at the beginning of the year. The tax office pays interest on the amount paid until the due date.

It should be noted that the provisional payments should roughly correspond to the expected tax burden. Some tax offices may not accept advance payments of any amount, but the provisional invoice can be adjusted at any time.