What to do in case of tax arrears in Switzerland?
Tax arrears in Switzerland? Payment facilitation, payment in installments, deferral, and tax remission: where to turn, what interest rates to expect, and what documents you need to submit.
Table of contents
- Which authority should you contact for tax matters in Switzerland?
- What options do you have if you cannot pay your taxes on time?
- Installment payment (Ratenzahlung)
- Deferral (Stundung)
- What documents are required to apply for payment by instalments or a deferral?
- What is the late-payment interest rate, and how do the cantons differ?
- When is there a chance of having a debt permanently waived (Steuererlass)?
- Sources
Which authority should you contact for tax matters in Switzerland?
In the vast majority of cases, you should contact the cantonal tax office responsible for your place of residence, not a central federal authority.
In Switzerland, taxes are levied at three levels: federal, cantonal, and municipal (communal). In practice, however, even the direct federal tax (Direkte Bundessteuer) is collected by the cantonal tax offices. This means that, for most private individuals, the same cantonal office can be contacted regarding all three types of tax.
In two cases, however, you must contact the Swiss Federal Tax Administration (Eidgenössische Steuerverwaltung, ESTV) directly:
for VAT matters (Mehrwertsteuer, MWST): typically for businesses and self-employed persons.
In withholding tax matters (Quellensteuer): in certain matters that fall directly under the jurisdiction of the ESTV.
This is important for Hungarian readers because withholding tax (Quellensteuer) affects many Hungarians working in Switzerland, for example those who do not hold a C settlement permit. Withholding tax is deducted from wages, but in cases of subsequent settlement, correction, or arrears, it is not always clear which authority is responsible. In such cases, it is advisable to first contact the employer handling payroll, then the cantonal tax office, and only afterwards the ESTV.
The exactly competent office can always be identified based on the issuer and address indicated on the tax authority letter (Steuerrechnung). The case number and contact details shown on the letter are the starting point for all further steps.
What options do you have if you cannot pay your taxes on time?
If you are unable to pay your taxes by the deadline, you have two main options: installment payment (Ratenzahlung) and deferral (Stundung). Both fall under the category of payment relief (Zahlungserleichterung).
The key principle is that payment relief is not granted automatically. You must submit an application to the competent tax office, which will assess your request. A timely, proactive application puts you in a significantly better position than waiting for a payment order or debt enforcement proceedings.
Installment payment (Ratenzahlung)
Installment payment allows you to settle the outstanding amount over several months. The conditions vary significantly from canton to canton.
In the canton of Zürich (Kanton Zürich) the following framework applies in 2026:
Type of tax account | Maximum installment payment period |
|---|---|
Provisional tax account (provisorische Steuerrechnung) | Up to 12 monthly installments |
Final tax bill (definitive Steuerrechnung) | Up to 6 monthly instalments under a simplified procedure |
These parameters apply to canton Zürich. Other cantons may have different timeframes and conditions, so the rules of the canton of residence should always be checked.
Deferral (Stundung)
A deferral means that the payment deadline is postponed to a later date. This may be granted if the payment difficulty is temporary and the debt is expected to be settled within a foreseeable period, for example due to overdue wages, a delayed payment, or a temporary liquidity shortfall.
It is important to know that neither payment by instalments nor a deferral eliminates default interest. The outstanding amount continues to accrue interest during the period of the payment arrangement.
What documents are required to apply for payment by instalments or a deferral?
The exact documentation required varies by canton, but proof of income and assets is generally the key requirement. In canton Zürich, for simpler instalment procedures, submitting the application is often sufficient, while other cantons require more detailed supporting documentation.
In canton Bern (Kanton Bern) a household budget (Haushaltbudget) must be submitted for payment by instalments or a deferral. This is a statement that itemises the household’s income and necessary expenses and shows how much can realistically be allocated to repayments.
A typical household budget includes the following items:
Income: net salary, plus any other regular income, such as family allowance or support payments.
Housing: rent or mortgage payments, as well as ancillary costs (Ancillary costs).
Health insurance: the monthly premium for mandatory basic insurance (KVG/LAMal).
Living expenses: food, clothing, transport, and communication.
Other obligations: existing loans, maintenance payments, and other regular burdens.
A common pitfall for Hungarian readers is that the documents and the application must be submitted in the canton’s official language, for example in German in Zürich and Bern. An inaccurate or incomplete household budget can lead to the application being rejected or the processing being delayed.
In general, it is advisable to prepare the following:
the most recent tax authority letter (Steuerrechnung) copy;
proof of income or a payslip (Lohnabrechnung);
proof of housing and insurance costs;
a brief explanation of the reason for the payment difficulties.
Before submitting, it is always advisable to check the current form and list of requirements of the cantonal tax office responsible for your place of residence.
What is the late-payment interest rate, and how do the cantons differ?
Late-payment interest (Verzugszins) is charged automatically from the moment the payment deadline is missed, and its rate varies by canton.
In canton Bern, late-payment interest on cantonal and municipal taxes is uniformly 4.00% in 2024, 2025, and 2026. This rate may be reviewed annually, so the canton’s official notice for the relevant year should always be checked.
Interest accrual has two key characteristics:
Automatic: late-payment interest accrues from the missed deadline, even without a separate notice.
May also be charged during an installment plan: In the canton of Bern, late-payment interest accruing during the instalment period is billed separately after the final instalment has been paid.
This means that someone who repays the debt over, for example, twelve months should also expect a separate interest invoice at the end of the repayment period. Instalment payments therefore provide time, but they do not reduce the cost of the debt.
For direct federal tax (Direkte Bundessteuer) and different interest rates may apply in the various cantons, which may change from year to year. Since in Switzerland almost every tax detail depends on the canton, the current interest rate in the canton of residence should always be checked separately, either on the cantonal tax office’s website or by phone.
When is there a chance of having a debt permanently waived (Steuererlass)?
Tax remission (Steuererlass) is the permanent cancellation of a debt on equitable grounds. It is subject to extremely strict conditions and can only be granted in exceptional cases.
The basis for remission is significant hardship (erhebliche Härte): a life situation in which paying the tax would jeopardize the taxpayer’s and their family’s livelihood. Examples include long-term illness, incapacity for work, a severe loss of income, or another lasting situation of hardship beyond the taxpayer’s control.
One important limitation clearly shows how strict the conditions are: in the canton of Bern, tax remission cannot be granted if the taxpayer had the funds needed to pay at the time the bill was issued. In other words, if the tax could have been paid at that time but the taxpayer used the money for another purpose, remission is generally ruled out. In such cases, payment by instalments may be considered instead, which takes the subsistence minimum (Existenzminimum) allows for gradual resolution in line with it.
The practical order is therefore important:
As a first step, it is advisable to request payment relief, namely an installment plan or a deferral.
Remission (Steuererlass) can only be realistic if there is a lasting, serious, and demonstrable hardship.
Remission must be requested in writing from the competent authority, with a statement of reasons and documents supporting the situation.
Tax remission is not intended to retroactively legitimize non-payment. The authority examines the full income and asset situation, and its decision is based on discretion. The conditions and procedure vary from canton to canton, so it is necessary to become familiar with the rules of the relevant canton.
Sources
Swiss Federal Administration – https://admin.ch/
Official portal of the canton of Zürich – https://zh.ch/
Official portal of the canton of Bern – https://be.ch/
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In Brief
In the event of tax arrears in Switzerland, you must contact the cantonal tax office of your place of residence, where you can request payment in installments or a deferral — however, there is no automatic right to these, and default interest continues to accrue during the facilitation period. Tax remission (Steuererlass) is only possible in cases of permanent, severe, and verifiable hardship, and is subject to extremely strict conditions.
Key Takeaways
- The competent authority can be identified based on the issuer and address indicated on the tax authority letter (Steuerrechnung) — it is advisable to check this before taking any steps.
- It is advisable to submit a request for payment in installments or deferral proactively, before the arrival of the payment order, as this provides a significantly better starting point.
- In the canton of Bern, a household budget (Haushaltbudget) must be attached to the installment payment request — incomplete documentation leads to rejection or delays.
- Default interest is also charged during the installment payment period; in the canton of Bern, a separate interest invoice is issued after the last installment is paid, which must be anticipated.
- Tax remission (Steuererlass) is only realistic in cases of permanent, severe, and verifiable hardship — if the tax could have been paid at the time the invoice was issued, remission is typically excluded.
- Conditions and interest rates vary by canton; it is always recommended to check the current rules of the canton of residence on the cantonal tax office's website or by inquiring over the phone.
Frequently Asked Questions
Which authority should be contacted in case of tax arrears in Switzerland?
In the vast majority of cases, you must contact the cantonal tax office of your place of residence. The direct federal tax (Direkte Bundessteuer) is also collected by the cantonal tax offices, so most individuals can contact the same office regarding all three types of taxes. The exact details of the competent authority can be identified based on the issuer and address indicated on the tax authority letter (Steuerrechnung).
How can one request payment in installments or a deferral in Switzerland?
Payment in installments (Ratenzahlung) and deferral (Stundung) must be requested in writing from the competent cantonal tax office. There is no automatic right to these; the office evaluates the request. A timely, proactively submitted request provides a significantly better starting point than if the taxpayer waits for the payment order or debt collection proceedings.
What documents are required for an installment payment request?
The exact document requirements vary by canton. It is generally recommended to prepare a copy of the latest tax authority letter (Steuerrechnung), proof of income or a pay slip (Lohnabrechnung), proof of housing and insurance costs, as well as a brief justification for the cause of the financial difficulty. In the canton of Bern, a household budget (Haushaltbudget) must also be submitted, which itemizes and compares income and necessary expenses.
How much is the default interest, and does it accrue during installment payments?
Default interest (Verzugszins) is automatically charged from the missed payment deadline, even without separate notification. Its rate varies by canton: in the canton of Bern, it is a uniform 4.00% in 2024, 2025, and 2026. During the installment payment period, the interest continues to accrue; in the canton of Bern, a separate interest invoice is issued after the last installment is paid. Payment in installments therefore provides time, but does not reduce the final amount of the debt.
When can one request the final remission of tax (Steuererlass) in Switzerland?
Tax remission (Steuererlass) is only possible under extremely strict conditions: in cases of permanent, severe, and verifiable hardship where paying the tax would jeopardize the livelihood of the taxpayer and their family. Typically, long-term illness, incapacity to work, or severe loss of income may be considered. If the tax could have been paid at the time of invoicing, remission is typically excluded.
Does withholding tax (Quellensteuer) affect Hungarians working in Switzerland?
Yes, withholding tax (Quellensteuer) affects many Hungarians working in Switzerland — especially those who do not have a C settlement permit. The deduction of withholding tax happens directly from the salary. In case of subsequent settlement, correction, or arrears, it is advisable to first contact the employer, then the cantonal tax office, and only after that the Federal Tax Administration (ESTV).
How do the installment payment conditions differ in the cantons of Zürich and Bern?
In the canton of Zürich, payment in installments is possible for up to 12 months for a provisional tax invoice (provisorische Steuerrechnung) and up to 6 months for a definitive tax invoice (definitive Steuerrechnung) in a simplified procedure. In the canton of Bern, submitting a household budget (Haushaltbudget) is required for payment in installments, and the default interest accrued during the installment period is requested on a separate invoice after the last installment. In both cantons, applications and documents must be submitted in German.
Related guides
- Tax Authority Letter or Tax Arrears in Switzerland: When Do You Need to Act?