When tax deadlines fill the cantonal coffers

Delaying the submission of your tax return or paying your taxes late is no trivial matter. For taxpayers, this results in fees, reminders, sometimes late-payment interest and, in the most serious cases, an assessment by the tax authorities. For the cantons, on the other hand, these delays constitute a regular source of revenue, which is sometimes very evident in the administrative accounts.

This issue is of direct concern to SMEs, the self-employed and their tax advisers. Behind what may seem like a routine extension of the deadline lie hidden costs, accounting arrangements that need to be managed and a cash flow risk. Practices vary considerably across cantons: some charge for extensions, whilst others grant them free of charge for part of the year. Tax delays thus become a management issue, not merely an administrative nuisance.

Extensions worth several million

According to a Blick survey covering eleven cantons, cantonal rules on tax filing deadlines vary considerably. The case of Bern illustrates the financial implications. In the canton of Bern, tax returns must in principle be submitted by 15 March, with exceptions, notably for the self-employed. Taxpayers may, however, request an extension until the end of November. This flexibility is charged depending on the requested date and the method used.

Until 15 July, an online application is free in Bern, whilst an application submitted by email, post or at a service counter costs 20 francs. To obtain an extension until 15 September, the fee is 20 francs online and 40 francs by email or at the counter. For an extension until November, the fee rises to 40 francs online and 60 francs at the counter. Blick reports that in 2024, these extensions brought in around 3.5 million francs for the canton of Bern. The same article states that only around 30 per cent of Bernese taxpayers submit their tax returns by the original deadline.

For a tax consultancy, these figures reveal something very specific: the extension has become widespread practice. It allows the work involved in finalising tax returns to be spread out, but it must not obscure the administrative cost borne by the client or the risk of files piling up at the end of the year. In an SME, an extension may be useful when the annual accounts have not yet been finalised, certain certificates are missing or supporting documents need to be clarified. But it does not address the underlying issue: the tax liability remains due, and the payment schedule must still be managed.

Geneva, Valais, Solothurn: same deadlines, different charges

In Geneva, the initial filing deadline is set at 31 March, according to Blick. After this date, the taxpayer receives a reminder accompanied by a charge. Requests for an extension can be made online, by telephone or by post between 1 January and 31 October. The fees are 20 francs for a three-month extension, 40 francs for up to five months and 60 francs for longer periods. Around 68,000 taxpayers in Geneva apply for an extension each year. However, according to Blick, the Geneva tax authorities point out that late payment interest generates more revenue than the administrative fees associated with extensions.

This clarification is important for businesses. A distinction must be made between a deferral of the tax return filing deadline and a delay in paying the tax. The former concerns the time allowed to submit tax information; the latter affects cash flow and may result in interest charges. A company may therefore have been granted an extension to file its tax return whilst still needing to keep track of its instalments, provisional statements or final accounts. Confusion between these two timelines can prove costly.

The canton of Valais also operates a phased system: extensions are possible until 31 July, then until 31 October and, in exceptional cases, until 31 December. Each extension costs 20 francs. For applications submitted by a tax consultancy firm, however, Blick reports a fee of 5 francs, thanks to a dedicated portal that reduces the administrative burden on the tax authorities. The canton collected around 860,000 francs last year from these extensions.

In Solothurn, an extension until 31 July is free of charge, whilst an extension until 30 November costs 30 francs, according to information reported by Blick. In 2024, the canton collected 1.9 million francs from individuals and around 260,000 francs from businesses. Around two-thirds of Solothurn taxpayers extend their deadline. In Basel-Stadt, the extension is free until the end of September, after which it costs 40 francs; this measure generated around 745,000 francs in 2025.

Why tax arrears carry a heavier burden than a simple fee

For the cantons, extension fees constitute a source of administrative revenue. But the real financial issue may lie elsewhere: interest on arrears. The purpose of this interest is to compensate for the late payment of an amount due. It does not follow conventional commercial logic; it stems from applicable tax law and depends on the level of tax concerned.

At federal level, the Federal Department of Finance sets the interest rates for taxes and duties collected by the Confederation. From 1 January 2025, the interest rates on late payment and on refunds are set at 4.5 per cent, whilst the interest rate on voluntary advance payments relating to direct federal tax is 0.75 per cent, according to the FDF. At cantonal level, each canton sets its own rates. The canton of Vaud, for example, has set a default interest rate of 3 per cent from 1 January 2012, 3.5 per cent from 1 January 2017, 4 per cent from 1 January 2022, 4.75 per cent from 1 January 2024, and then 4 per cent from 1 January 2026.

For an SME, these rates must be viewed as an unavoidable cost of financing. When a business uses its cash flow to pay wages, suppliers or urgent expenses rather than settling its taxes, it can temporarily ease the pressure on its bank account. However, the tax authorities charge interest on the time elapsed, and this cost adds to other liquidity pressures. The question is therefore not merely whether the company can obtain an extension to the payment deadline, but whether it has correctly budgeted for the tax due.

This distinction is particularly relevant for the self-employed and small businesses whose income fluctuates. A strong financial year may result in a higher tax bill than expected; conversely, a weaker year may justify an adjustment to advance payments. In both cases, it is best to document the situation, update forecasts and discuss the matter with your tax adviser before reminders and interest start to mount up.

A paradox for SMEs: clients who are poor payers, but good revenue from the state

Late payment is a familiar issue for Swiss businesses, but from a different angle: that of customers who pay their invoices too late. According to Intrum, Swiss companies spend an average of 77 working days a year recovering overdue debts, compared with 59 days in 2023 and 61 days in 2024. Dun & Bradstreet, for its part, reports that in 2024, 17.9 per cent of B2B invoices in Switzerland were paid late, with an average delay of 15.1 days. The canton of Zug has the highest rate of B2B invoices paid late, at 27.6 per cent, ahead of Ticino at 26.6 per cent.

This context sheds light on the fiscal paradox. Delays by taxpayers can boost certain cantonal revenues through late payment charges and interest, whilst delays between businesses directly undermine the cash flow of SMEs. According to Agefi, around a third of Swiss SMEs report a negative impact on their turnover due to late payments, and one in five SMEs fears having to cease trading because of unpaid bills.

In practice, a business can therefore find itself caught in a vice-like grip: its customers pay late, its day-to-day expenses remain due, and its tax obligations fall due according to their own timetable. The temptation to defer tax then becomes strong. But this reflex often amounts to merely shifting the problem elsewhere. The accountancy firm must act as a watchdog here: drawing up a cash flow plan, distinguishing between tax liabilities and trade payables, forecasting VAT, social security contributions and tax instalments, and then prioritising payment deadlines according to risk.

The tax adviser as a safeguard against unexpected tax assessments

Cantons that charge late payment fees do not necessarily penalise taxpayers who are late: they are simply monetising administrative flexibility. But when a case fails to progress, the situation takes on a different character. Blick points out that taxpayers who fail to submit their tax returns first receive a reminder. In the most serious cases, a fine may be imposed. If no tax return is ultimately submitted, the tax authority will proceed to estimate income and assets, a procedure that is generally less favourable to the taxpayer.

For an SME or a self-employed person, an ex officio assessment is rarely a favourable outcome. It can result in a tax liability that bears no relation to the economic reality, require corrective action and take up time at a moment when the business should be focusing on its core activities. The right strategy is therefore not to avoid the tax authorities, but to stay on top of the matter: gather the necessary documents, file supporting evidence, validate the accounts, check declared salaries, review social security contributions and prepare the information required for the tax return.

Certain measures are simply a matter of sound business sense. An SME can maintain a shared tax calendar with its accountant, schedule progress reviews ahead of cantonal deadlines, estimate tax liability based on available results, and avoid treating an extension of the filing deadline as an automatic extension of the payment deadline. It can also discuss with a professional whether it is appropriate to adjust advance tax payments when business activity is changing significantly. These steps do not replace a case-by-case tax analysis, but they reduce the risk of being at the mercy of deadlines rather than managing them.

The debate on default interest is ongoing. In September 2023, the National Council adopted a bill aimed at aligning the late payment interest applied by the Confederation with market rates, replacing the fixed rate of 5 per cent with a variable rate based on the Swiss Average Rate Overnight, according to PME.ch. For businesses, this confirms a trend: the cost of tax arrears will increasingly depend on parameters that need to be actively monitored. In an environment where the cantons collect significant sums thanks to payment delays and where SMEs themselves suffer from late payments, administrative discipline is becoming a subtle competitive advantage. It does not eliminate the tax, but it prevents it from costing more than necessary.