Less taxes for married couples!
Contact
Öffnungszeiten:
Monday to Friday
08.00 - 12.00 h / 13.00 - 17.00 hFernsupport durch Caminada:
The federal council published on March 21, 2018 the dispatch of the taxation of spouses. With this an end shall be put to a controversy that was going on for ages and the unconstitutional over taxation of spouses shall be eliminated.
The marriage penalty has been considered unconstitutional by the Swiss federal court on several occasions. It’s high time to abolish this penalty and to find an acceptable solution for the taxation of spouses. The dispatch is a good compromise and deserves broad support.
The marriage penalty is based on the fact that the income of spouses is added and then taxes. With these added up incomes their progressive taxation raises substantially comparted to unmarried couples where every single income is taxed.
The dispatch indicates that the tax authorities will have to calculate the taxes of married couples twice. On one side the shall use the same method as today and on the other side they shall calculate how much taxes the couple would have to pay if it was not married. The lower amount then shall be charged. This proposal now goes into parliament for discussion. If the parliament is in favour, the change could come in power by 2022.
The proposal will lead to substantial tax losses in the amount of roughly 1.2 billion Swiss francs, whereof 1 billion will be suffered by the federation and the rest by the cantons. As finance minister Ueli Murer said, the federation can afford this tax loss due to the favourable situation, another austerity program will not become necessary.
Discriminated were about half of the married couples. Around 90 percent of the tax savings concern couples who have a taxable income of more that 100’000 Swiss francs, who are a minority of 11 % the spouses. This minority group – double income spouses with high incomes – are the ones that have been most discriminated by the marriage penalty for many decades.
The reform will have a raising tax burden as a consequence for other groups. Unmarried couples with children have profited in the past from the favourable parent taxation even though their incomes are not added and then taxed. The federal council wants to abolish this unfair privilege with the same proposal.
The federal council wants to exempt single parents from this new ruling, as they are often at risk of poverty. Therefore – for this special group – an extra tax free amount of 11’500 Swiss Francs shall be granted to reduce poverty risks.
The dispatch has good chances to get through parliament, as the pressure to find a solution after decades of discussion is big. A little sceptical are the cantons as the double calculation for all couples might lead to extra cost within their taxation authorities.
If you have questions concerning the marriage penalty or any other individual taxation issue our tax consulting expert Christian Lingg is more than ready to help you along. Just get in touch.
