Tax glossary
Discretionary assessment
In a discretionary assessment the tax office estimates your income and wealth itself because no tax return was filed despite a reminder — and the estimate is usually far too high.
If a taxpayer fails to meet their procedural obligations — typically by not filing a tax return despite a reminder — the tax office makes an assessment at its own due discretion. The authority estimates income and wealth on the basis of the information available to it: previous assessments, salary reports and industry benchmarks.
The estimate is deliberately not generous. The authority may, and is expected to, set it at the upper end of what is plausible, so that failing to cooperate is not rewarded. In practice, a discretionary assessment therefore regularly comes out well above the tax actually owed.
On top of that, if the return is still not filed after the (free) reminder, a fine for breach of procedural obligations may follow. A discretionary assessment is therefore costly in more ways than one.
Stricter rules for objections
Stricter rules apply to objecting against a discretionary assessment than against an ordinary one. The objection is only admissible if it states reasons and proves that the estimate is wrong — simply calling it too high is not enough.
In practice, this proof is almost always provided by submitting the missing tax return, complete and with supporting documents, together with the objection. Without it, the tax office will not consider the objection and the estimate stands.
- Deadline: 30 days from receipt, as with any assessment
- Mandatory: a complete tax return with all supporting documents
- Mandatory: reasons explaining where the estimate is wrong
- Otherwise: the objection is dismissed — the estimate becomes final
Don’t let it get that far
The simplest way to avoid a discretionary assessment is to apply for a filing extension in good time. It takes a few minutes, and a first request submitted in time is deemed approved even without a reply.
Even if your documents are incomplete, a tax return filed with a note that further documents will follow is better than none at all. The tax office will then set a deadline for the missing items — a far milder measure than an estimate.
Consequences for later years
A final discretionary assessment has lasting effects: the tax office uses it as the starting point for later estimates, and it influences the provisional tax invoices of the following years. Health insurance subsidies, grants and other systems based on the tax assessment also rely on the inflated figures.
Example: overlooked after moving
Someone moves to Winterthur in the summer; the tax return gets lost in the move, and so does the reminder. In the autumn of the following year a discretionary assessment arrives with an estimated taxable income of CHF 95,000 — the actual figure was CHF 62,000.
Depending on progression, the difference of CHF 33,000 means roughly CHF 8,000 to 9,000 too much tax. It can only be corrected by submitting the complete tax return with all supporting documents, together with a reasoned objection, within 30 days. Miss that deadline and you pay the difference.
Frequently asked questions: Discretionary assessment
Can I simply write that the estimate is too high?
No. With a discretionary assessment, merely disputing it is not enough — you have to prove it is wrong, which in practice means submitting the complete tax return.
Will the fine be cancelled if my objection succeeds?
Not automatically. The fine penalises the breach of procedural obligations, not the amount of tax. It is dealt with in separate proceedings.
What if I never received a tax return?
The obligation to file applies even if you were not sent the form. If you do not receive a tax return, you must request one from the municipal tax office — especially after moving to a new municipality.
Questions about this term?
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