Deduct car loan from tax: This applies

Anyone paying off a loan in Switzerland can deduct the interest on the loan from tax up to an amount of CHF 50,000. This therefore also applies to a Car loan. You can find out how this works in this article.

In contrast to a lease, debt interest on a loan is tax-deductible. The Swiss Tax Relief Ordinance SR 642.11 Art. 33 states: Debt interest from personal loans can be deducted from income in the tax return up to an amount of CHF 50,000.

However, the following applies: Lending is prohibited if it leads to over-indebtedness (Art. 3 UWG). This is why lenders check whether a borrower is creditworthy before granting a loan.

Is loan interest tax-deductible for all loans?

You can deduct loan interest for the following loans in your tax return:

1. Personal credit and personal loans: These include loans such as car loans, small loans, consumer loans or private loans granted to you by friends, family or private lenders.
2. Credit cards: You can also claim the interest you pay on your credit card instalments for tax purposes.
3. Mortgages: If you own your own home, you can deduct the mortgage interest from your income in your tax return.

So don't forget to deduct the loan interest from your income on your next tax return. This will save you taxes and can, for example, avoid the nasty surprise a high tax arrears payment avoid. To do this, you simply need the bank's interest certificate. Enclose this with your tax return and enter the interest in the list of debts on your tax return.

Can I deduct the interest on leasing for tax purposes?

Unfortunately not. Leasing does not count as a loan. It is a rental agreement: A leasing contract is therefore similar to a hire contract for your vehicle. However, the vehicle belongs to the leasing company or the bank. Leasing instalments are therefore not deductible.

However, the situation is different for companies: Swiss companies are allowed to deduct the interest on a lease from their taxes. So if you own a company, we recommend that you check whether leasing is more interesting for tax purposes than a car loan.

We would be happy to advise you: +41 44 244 34 00.

Car loan or leasing: What do I need to consider?

Are you a private individual looking to purchase a vehicle? But you don't yet know which form of financing is right for you?

As a private individual, you save money with a car loan: Firstly, a car loan is tax-deductible. Secondly, the interest rates for a car loan are comparable to those of a lease (we offer car loans from as little as 4.4 per cent). And thirdly, your vehicle belongs to you from the outset, not to a bank. You can therefore sell it at any time and repay the current car loan early. With leasing, you remain committed year after year for as long as the contract runs. In this article, you will learn about both the advantages and disadvantages of car loans and leasing.

If you have any questions about loans or would like advice, we will be happy to help you: +41 44 244 34 00.

What can I claim with a loan?

With a loan, you can only deduct the interest from your taxes, not the loan costs: the amount of money borrowed, for example, is not deductible from your taxable income. You cannot deduct the so-called amortisation portion from your taxes.

If you have several loans or credit card debts, the interest on these debts can also be deducted.

Apply for a car loan now

Would you like to apply for a car loan? Congratulations!

You must fulfil these criteria before you can apply for a loan:

• Minimum age 18 years, maximum age 70 years
• Resident in Switzerland, the Principality of Liechtenstein or cross-border commuter
• Swiss citizenship or residence permit C, residence permit B, residence permit G
• Regulated income

Also important: If you take out several loans, the bank will check whether you can afford them. This is because granting a loan is prohibited if you become overindebted as a result (Art. 3 UCA). To prevent your loan from being rejected, it is worth contacting us for advice: +41 44 244 34 00. It may be possible to reschedule or increase existing loans and negotiate new conditions.

We also recommend a credit rating adjustment: Thanks to a good credit rating (creditworthiness), you get better interest rates on loans.

You can get a car loan with us from as little as 4.4 per cent. Calculate and apply for your car loan today. If you have any questions about the loan, please do not hesitate to contact us: +41 44 244 34 00.