Tax glossary
Voluntary disclosure
A voluntary disclosure is a self-initiated report of previously undeclared income or assets to the tax office — the first time you do it, you pay only the back taxes plus interest, with no fine.
Failing to declare income or assets is tax evasion. If the tax authorities discover it, you face back taxes, late-payment interest and a fine — usually equal to the evaded tax, and up to three times that amount. A voluntary disclosure (straflose Selbstanzeige) offers a way back: if you report the undeclared assets yourself before the authorities know about them, the fine is waived entirely the first time.
Penalty-free does not mean free. You still owe back taxes for all open years, going back a maximum of ten tax periods, plus late-payment interest. The penalty-free route is available only once in a lifetime. Any later disclosure still leads to a much reduced fine of one fifth of the back taxes, but no longer to full exemption from penalties.
The rules have applied across Switzerland since 2010, for the direct federal tax as well as cantonal and municipal taxes. In Zurich they are set out in § 235 of the cantonal Tax Act. In practice, disclosures rarely involve large fortunes: more often it is a forgotten bank account back home, an inheritance that was never declared, crypto holdings, or a side income that was left off the return for years.
Conditions for avoiding a fine
The law ties the exemption from penalties to three conditions. If they are not all met, the disclosure can at most reduce the fine.
- No tax authority is already aware of the evasion
- You cooperate fully and unconditionally in calculating the back taxes
- You make a genuine effort to pay the back taxes owed
- The report is clearly identified as a voluntary disclosure — quietly adding the assets to next year's return is not enough
What a disclosure costs
Back taxes are calculated as if you had declared the income and assets correctly from the start. Late-payment interest is added from each original due date. For modest amounts the total is usually manageable; for substantial income over ten years it can be significant.
For Swiss interest and dividends there is also the question of the 35% withholding tax. Since a 2019 legal change it can, under certain conditions, still be reclaimed after a late declaration if the proceedings are not yet final — this needs to be checked case by case.
Special case: inheritances
Heirs who discover that a deceased parent had undeclared assets can report this too. For them a simplified procedure applies: back taxes are charged only for the last three tax periods before the year of death, plus interest, and no fine is imposed. Again, the authorities must not already know, and the heirs must cooperate fully.
- Reported by the heirs or the executor
- Back taxes for three years instead of up to ten
- Available even if the deceased never made a disclosure themselves
Example: The inherited account in Germany
A retiree in Winterthur-Veltheim inherited a savings account in Konstanz from her aunt in 2016, worth around CHF 85,000. Unsure what to do, she never declared it. After a query from her bank in connection with the automatic exchange of information, she decides to put things right before the tax office acts on its own.
We file a disclosure clearly labelled as such, enclose the account statements since 2016 and prepare corrected securities registers. The tax office calculates the back taxes on the assets and interest for the open years plus late-payment interest. For an account of this size, the total is typically in the low four figures — and the fine that would have been added had the account been discovered is waived.
Frequently asked questions: Voluntary disclosure
Can I just add the account to my next tax return?
No. A quiet correction does not count as a voluntary disclosure. You must state explicitly that you are reporting previously undeclared assets — otherwise you still risk penalty proceedings for earlier years.
Is it too late once the tax office has sent a query?
Once the authorities know about the evasion, the penalty-free route is closed. Coming clean still reduces the fine, which is why acting early matters.
Will my employer or my municipality find out?
Disclosures are covered by Swiss tax secrecy. The tax office does not pass the information on to employers or other third parties.
Do I have to pay the back taxes in one go?
Not necessarily. Instalments are possible for larger amounts. What matters is that you make a genuine effort to pay — that is one of the conditions for avoiding a fine.
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