Switzerland To Vet Proposal For Expanded IHT
by Ulrika Lomas, Lowtax.net, Brussels
06 June, 2014
The Swiss Council of States has asked its advisory committee to assess the constitutionality of the Socialist Party's inheritance tax initiative before it proceeds with its debate on the proposal.
The popular initiative calls for a national inheritance tax (IHT) of 20 percent to be imposed on inheritances over CHF2m (USD2.3m) and gifts exceeding CHF20,000, with retroactive effect from 2012. The proposal requires a transfer of taxing rights from the Swiss cantons to the Confederation. It recommends that two-thirds of the national IHT revenue should flow to fund Switzerland's social security and pension fund (AHV), while the remaining third should be allocated to the cantons as compensation.
The Swiss Federal Council opposes the initiative, which it says impinges on tax federalism and would deprive the cantons of about CHF1bn annually.
Meanwhile, Swiss business federation, Economiesuisse, has said the initiative must swiftly be declared unconstitutional, to restore legal certainty for the many family businesses in Switzerland. If adopted, the initiative would put at risk thousands of family-owned enterprises, which are currently exempt from inheritance tax in almost all cantons in Switzerland, it noted. Family businesses with insufficient funds to cover the levy will either have to be liquidated or sold, affecting tens of thousands of jobs, it warned.
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