Tax

Swiss Lawmakers Reject Inheritance "Solidarity" Tax

Tom Burroughes Group Editor London 13 November 2024

Swiss Lawmakers Reject Inheritance

The decision to reject the ideas come as Switzerland is mindful of trying to bolster its competitiveness as an international financial centre.

Swiss lawmakers in the federal council have thrown out a proposal to introduce a “solidarity tax” on inheritances to pay for the country’s AHV old-age pension system. They also rejected attempts to end bank secrecy within Switzerland.

The moves come at a time when the Alpine state – still the world’s largest cross-border jurisdiction – is seen as benefiting from an influx of HNW individuals leaving countries such as the UK. 

Last week, in a vote of 17 to eight, a parliamentary committee dealing with tax and economic issues proposed to not follow up on a parliamentary initiative to levy such a tax on inheritances worth several million francs.

Most lawmakers thought that “any infringement of the fiscal sovereignty of the cantons must be avoided as well as the economic double taxation that would result from the combination of a federal inheritance tax with taxes on existing wealth,” a statement has said.

Such a move could encourage wealthy people to take their wealth abroad, and damage the ability of family businesses to handle succession, it said.

A statement from the committee added the following caveat: “On the other hand, the majority of the committee believes that an overview of the AHV is necessary before a new method of financing this pension institution can be considered. The minority sees the federal inheritance tax within the meaning of the initiative as a contribution to intergenerational equality and sees it as a means of helping to finance the increased needs of the AHV.”

In a separate vote, lawmakers decided 16 to nine not to follow an initiative on an automatic exchange of information on financial accounts within Switzerland, as is already the case abroad. The initiative wanted to end this secrecy to fight tax evasion and forgery. 

The vote was designed to “preserve financial privacy”. 

The parliamentary committee “considers that citizens are generally trustworthy. According to the majority, an automatic exchange of information would create disproportionate costs, given that the tax authorities already have the necessary instruments to detect tax evasion and forgery.”

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