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Switzerland: Abolition of Marriage Tax Penalty Proposed

(Apr. 5, 2018) On March 21, 2018, the Swiss Federal Council (the Swiss government) adopted a legislative proposal to abolish the “marriage tax penalty” (marriage penalty). The proposal is designed to resolve the decades-long controversy surrounding the issue. (Swiss Federal Council, Botschaft zur Änderung des Bundesgesetzes über die direkte Bundessteuer (Ausgewogene Paar- und Familienbesteuerung) [Message Concerning the Amendment of the Federal Act on the Federal Direct Tax (Balanced Tax Burden for Couples and Families)] (Mar. 21, 2018), Federal Council website; Entwurf, Bundesgesetz über die direkte Bundessteuer (DBG) (Ausgewogene Paar- und Familienbesteuerung) [Draft, Federal Act on the Federal Direct Tax (Balanced Tax Burden for Couples and Families)], Federal Council website.) The Federal Council proposes an “alternative taxation” model that would relieve the tax burden imposed by mandatory joint filing on married couples with double incomes and retired married couples with average to high income. (Medienmitteilung, Eidgenössisches Finanzdepartement, Bundesrat verabschiedet Botschaft zur Beseitigung der Heiratsstrafe [Press Release, Federal Department of Finance, Federal Council Adopts Message Concerning the Abolition of the Marriage Penalty] (Mar. 21, 2018).)


As in many countries, the term “marriage penalty” is used in Switzerland to describe the possible disadvantageous discrepancy of the taxation of married couples compared to unmarried couples. (Federal Department of Finance, supra.) According to article 9 of the Federal Act on the Federal Direct Tax, married couples are required to file a joint tax return, and their income is always added together, regardless of their chosen matrimonial property regime. (Bundesgesetz über die direkte Bundessteuer (DBG) [Federal Act on the Federal Direct Tax (DBG)], Dec. 14, 1990, SYSTEMATISCHE SAMMLUNG DES BUNDESRECHTS [SR] [SYSTEMATIC COMPILATION OF FEDERAL LAWS] 642.11, art. 9, Federal Council website.) As a result, approximately 80,000 out of 800,000 married couples with double incomes and approximately 250,000 out of 400,000 retired married couples must pay more taxes than unmarried couples in the same economic situation. (Reform der Ehe- und Familienbesteuerung [Reform of Taxation of Married Couples and Families], FEDERAL DEPARTMENT OF FINANCE (Mar. 2018).)

Various attempts to abolish the marriage penalty over the years have not been successful. In the most recent attempt in February 2016, an initiative and referendum failed because they were combined with a proposal to add a definition of marriage as a “long-term legally regulated union between a man and a woman” to the Constitution, thus excluding homosexual couples. (Jenny Gesley, Switzerland: Rejection of Abolishment of Marriage Tax Penalty and Constitutional Definition of Marriage, GLOBAL LEGAL MONITOR (Mar. 11, 2016).)

Proposed Amendment

The proposal by the Federal Council introduces an “alternative taxation” model. In a first step, the joint tax burden of the married couple would be determined according to the existing regulations. In a second step, the tax burden would be calculated separately, as if the couple were not married. The married couple would have to pay only the lower amount. (Message Concerning the Amendment of the Federal Act on the Federal Direct Tax (Balanced Tax Burden for Couples and Families), supra, at 20.)

Currently, unmarried couples with children receive the same tax reductions as married couples, even though their incomes are not added together. According to the proposed amendment, unmarried couples and single parents would no longer be subject to the married-couple taxation scheme. The amendment would result in a higher tax burden for unmarried couples with children. Single parents, however, would benefit from a new tax deduction in order to offset the additional burden. (Id. at 38.)


Opinions on the “marriage penalty” among Swiss political parties diverge considerably. The parties SP (Sozialdemokratische Partei der Schweiz [Social Democratic Party of Switzerland]) and FDP (Fresinnig-Demokratische Partei der Schweiz [Free Democratic Party]) prefer separate taxation also for married couples, whereas the parties CVP (Christlichdemokratische Volkspartei der Schweiz [Christian Democratic People’s Party of Switzerland]) and SVP (Schweizerische Volkspartei [Swiss People’s Party]) want to maintain the joint taxation of families. The Swiss cantons (the states) want the federal tax to match the cantonal family taxation system (income splitting or double tariff). What the majority of people will vote for in the end remains uncertain. (Hansueli Schöchli, Die Jagd auf das Phantom der “Heiratsstrafe” [The Hunt for the Phantom “Marriage Penalty”], NEUE ZÜRCHER ZEITUNG (Feb. 27, 2018).)

Prepared by Felicia Stephan, Law Library intern, under the supervision of Jenny Gesley, Foreign Law Specialist.