Individual Taxation

Tax implications of gifts – what to consider for the festive season

The end of the year is approaching and you may still be looking for the right Christmas gift for friends, family and acquaintances. From a tax perspective, gifts in the amount of the usual occasional gift (set at CHF 5,000 in the canton of Zurich) are generally irrelevant. If, in the pre-Christmas spirit, the donor wishes to make an even more generous gift, the following in particular should be noted (in the Canton of Zurich)

  •  Gifts to spouses or registered partners and descendants are not subject to gift tax.
  • Gifts to partners, fiancé(e)s, parents, siblings, godparents/godchildren, etc. are generally taxable, but a certain tax-free amount can be deducted from the total gift (e.g. CHF 15,000 for godchildren).
  • The recipient is liable for the gift tax (with joint liability with the donor) and must file a gift tax return within 3 months of receiving the gift. The gift tax return must be filed even if the gift is generally exempt from gift tax due to the tax exemption.
  • Multiple gifts made by the donor to the same recipient over the years must be added together to determine the tax liability.
  • If you wish to open an account for your godchild, you will remain tax liable on the account (as you will be listed as the account holder) unless the account is held directly in the godchild’s name. In this case, the godchild’s parents will be tax liable for the account until the child reaches the age of majority.

If you are looking for a (tax-saving) Christmas gift for yourself:

Pillar 3a contributions can be (partially) deducted from your taxable income: For an employee with an occupational pension, the contribution for 2023 is limited to CHF 7,056; for an employee without an occupational pension, the maximum deduction is set at CHF 35,280.

And for those who are already planning for 2024, the maximum deductions will remain the same in 2024.