In Switzerland, the debate over inheritance taxation regularly resurfaces within the scope of federal political rights.
Because the authority over inheritance tax traditionally falls under the exclusive jurisdiction of the cantons, any federal popular initiative seeking to introduce a national tax proposes a profound reorganization of the Swiss tax model.
Proposals of this kind aim to introduce a federal tax targeting very large inheritances and donations, thereby breaking with the current cantonal tax fragmentation.
The proposed tax mechanisms and the tax base
The plan for federal harmonization is structured around a specific rate and high exemption thresholds:
- The creation of a uniform federal tax: The initiative provides for the levy of a harmonized national inheritance tax on inheritances and donations, whereas the vast majority of cantons currently exempt direct descendants and surviving spouses.
- A very high tax-free allowance: The proposal targets large assets exclusively by introducing a significant basic exemption, so that inheritances below this threshold remain entirely tax-free, while the excess portion is subject to a specific tax rate (usually progressive or a high proportional rate).
The earmarking of revenues and anti-avoidance clauses
In addition to harmonizing the rate, the initiative redefines the distribution key for the public funds generated and provides for strict control mechanisms:
- The social or ecological earmarking of revenues: Unlike current cantonal taxes, which flow into the general budgets of cantons and municipalities, the revenue generated at the federal level is specifically earmarked for financing fundamental social insurance, primarily the Old-Age and Survivors' Insurance (AHV), or for measures related to adaptation and the ecological transition.
- Retroactivity and transitional provisions: To prevent advance asset transfers and tax optimization before the constitutional revision actually takes effect, the text includes transitional provisions that retroactively include inter vivos gifts from the date of the initiative's submission or publication.
It would call into question the current system, in which inheritance tax is the prerogative of the cantons. The minimum share guaranteed to heirs is subject to a different rule: the compulsory portion.
Legal sources
Federal legislation and political rights:
- Art. 127 Cst. (cited in Federal Supreme Court judgment 1C_586/2013 ; Federal Supreme Court judgment 2C_1134/2015 ) (principles of generality, equal treatment, and ability to pay in tax law)
- Art. 75a PRA (deadlines and procedures for submitting popular initiatives to a vote by the people and the cantons)
Federal case law:
- Federal Supreme Court judgment 2C_1134/2015 (admissibility of inheritance tax rates, progression, and tax-free allowances with regard to the principle of ability to pay)
- Federal Supreme Court judgment 1C_586/2013 (constitutional review and substantive validity of initiatives introducing redistributive taxes and tax thresholds)