Married couples are taxed jointly, i.e., both incomes and net wealth of a married couple are added together and taxed as a whole. Depending on the level of joint income and net wealth and due to the progressive nature of the taxes, the married couple might move into a higher tax progression band. This may result in a considerably higher tax burden at the level of the direct federal tax than that of unmarried couples in the same economic situation. Under cantonal law, the adjustments should usually sufficiently reduce the amount of tax. The disparity therefore concerns mainly the direct federal tax. This phenomenon is known as "penalization of marriage". The current Swiss tax system thus often leads to a situation in which one spouse (due to prevailing role distribution mainly women) reduces or even gives up his/her professional activity.

In response to this over-taxation resulting from the combined taxation of both married couples’ incomes, and parallel to the launch of a popular initiative with the aim of introducing individual taxation, the Federal Council adopted in September 2021 an analysis on the individual taxation of married couples and defined in May 2022 the guidelines of the proposal intended for consultation.

Under these guidelines, it is planned that the spouses file their tax returns separately and are thus taxed separately like unmarried couples. This proposal for individual taxation would primarily benefit married couples whose income is equally divided. Indeed, according to the progressivity of the tax scale, the tax burden of households strongly depends on the distribution of income. Thus, married couples with a single income or couples with a modest secondary income may face additional tax burdens and will therefore be discriminated by the new individual taxation system. For this reason, it is intended that the proposal will present two different models of individual taxation, as well as additional measures such as reliefs for, among others, single-earner married couples, single-parent families or single persons. Overall, the Federal Council expects a reduction in revenue of CHF 1 billion due to the introduction of individual taxation.

By autumn 2022, the Federal Department of Finance will prepare a draft on individual taxation for consultation, which will provide more details on this new taxation method. The entry into force may be expected by January 2024 at the earliest.

Finally, it should be noted that individual taxation will be provided for at all levels of government. Thus, the cantons will be responsible for implementing the reform at cantonal and municipal levels.

Practical implications

Individual taxation of married couples should reduce the burden of direct federal tax on married couples with more or less equal incomes and promote the work of women. By abolishing the marriage penalty, Switzerland would have a tax system better suited to the modern dual-earner couple.