After an initial proposal failed in the consultation process, the key parameters for individual taxation have now been set. It is not yet clear when the change of the system will take place. Since the cantons must also adapt their tax laws, a longer time horizon can be expected.
The incentives and major changes are described below.
Positive incentives to work
Under the new model, every person of age files a separate tax return, regardless of marital status. This eliminates the negative aspect for married couples that their income is added together and consequently taxed at a higher rate than would be the case for concubinage couples in the same situation.
Increase in child deductions & single-parent families
The child deduction on the federal tax level will be increased to CHF 12,000. It is also expected that child deductions will be increased at the cantonal levels.
In return, further deductions for single-parent families are to be waived.
Tax tariffs
Currently there are single and married/ parent tax tariffs. Newly, there is to be a tax tariff that is applicable to all. The tax rates will be reduced for lower incomes and increased on higher incomes, resulting in a shift in the tax burden, with higher incomes more likely to bear a higher portion of the tax burden.
Couples with an even income distribution are expected to benefit from the new tax tariff, as the average tax rate is more likely to be reduced in these situations.
Change in tax burdens
Singles and retired couples are also expected to see a reduction in their overall tax burden due to the lowering of the tax rate on lower and middle incomes.
The current tax system favours traditional family models, and these advantages would be eliminated by the change to individual taxation. The reason is that each partner can, for example, claim half of the child deductions. However, if no income is earned or the second income is very low, the tax saving effect of the deductions is lost leading to an overall additional tax burden.
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