Some taxes, such as VAT, stamp duty and withholding tax, must be declared and paid spontaneously, with the tax authority intervening only in the event of a request for additional information or a tax audit. In contrast, direct federal tax and cantonal and communal tax on profit and capital are notified by a tax authority which determines the tax burden on the basis of the taxpayer’s declaration and information, the so-called “mixed” procedure.
Under this procedure the taxpayer has to pay taxes – as well as costs and interest – on the basis of the final tax slips. However, the administration may also issue a provisional tax assessment or request advance payment of taxes in instalments. Taxes collected on the basis of a provisional assessment or on the basis of instalments are set off against the taxes due on the basis of the final assessment. This results in a balance in favour of the taxpayer or the tax authority at the time of the tax due date, which does not necessarily correspond to the date of notification of the tax slips and varies between direct federal tax and cantonal and municipal taxes.
Direct federal tax generally falls due on 1 March of the calendar year following the tax period concerned, but interest on arrears only accrues from the 31st day following notification of the provisional or definitive tax assessment slip, but not on instalments.
In Geneva, cantonal and communal taxes are generally due on the last day of the fiscal year concerned, and the interest on arrears runs from the 31st day following this date. In addition, interest on arrears runs on unpaid instalments.
It is therefore advisable to check the balance of cantonal and municipal taxes on the last day of the tax period, taking into account carryovers from previous years and advance payments, and if necessary to request additional payment slips in order to pay the estimated tax balance on time and avoid default interest.