Latest significant Swiss news headlines to stay informed this week:
Switzerland Transforming Marriage and Taxes: A Modern Approach
Get ready for a new era in Switzerland, as the Swiss Council of States has taken a significant step towards redefining marriage and taxes. Deputies have finally approved a monumental reformation, allowing for separate taxation of spouses, rather than the traditional joint taxation system.
For decades, married couples in Switzerland have been subjected to joint taxation, a legacy of an era when many women did not work outside the home. Today, things have changed drastically, but the outdated tax system remains. Even same-sex couples in registered partnerships face this challenges.
However, with the new system, if both partners are employed, they will no longer have to pay higher taxes than unmarried couples due to their income being combined and taxed together regardless of who made what.
Switzerland Embracing Progressive Change
In response to criticism over the "penalization of marriage," Switzerland is moving towards individual taxation by 2027. Each person, regardless of marital status, will file their own tax return, leaving behind the joint taxation model. Yet, married couples with children will still be able to file a joint statement for deductions.
The new tax system has major implications for families and individuals. While it could reduce the tax burden on married couples with dual incomes, it may also increase administrative complexity as individuals navigate separate returns while benefiting from joint deductions for children.
Modernizing the Swiss Tax System
Here's a glimpse into the key changes the reform brings:
- Individual Tax Returns: Each individual will need to file their own tax return.
- Joint Statement for Deductions: Married couples with children will jointly submit a statement for deductions.
- Deductions for Children: The deduction per child will be capped at 10,700 francs to maintain budgetary balance while supporting families.
- Tax Scale: The tax scale remains the same, meaning the state will incur costs of approximately one billion francs[1].
This transformation is part of ongoing debates in Switzerland's parliament around tax reform, shaping the future of taxation for married couples in Switzerland[2]. In essence, the shift towards individual taxation in 2027 marks a significant change, aiming to make the tax system more equitable while still supporting families.
[1] Bundesamt für Finance. (2022). Steuerreform: Einzelsteuerung ("Individual Taxation").[2] Parliament of Switzerland. (2022). Steuerberatung des Parlaments. ("Parliament’s Tax Advice").
- The upcoming transformation in Switzerland's tax system, set for 2027, will require each individual to file their own tax return, signifying a departure from the traditional joint taxation model.
- Concurrently, married couples with children will be able to jointly submit a statement for deductions, which could help alleviate the tax burden for families.
- In an effort to maintain budgetary balance, the deduction per child will be capped at 10,700 francs, a move that aims to support families while ensuring the system remains financially viable.
- This modernization of the Swiss tax system is part of larger policy-and-legislation discussions in the parliament, indicative of a progressive shift in Switzerland's politics and general news.
