GENEVA, SWITZERLAND – A popular initiative that will be put to Swiss voters if the required 100,000 signatures are collected by 16 February could have a significant impact on inheritance taxes in Switzerland. The measure, if approved, would see a federal law rather than the current mix of cantonal laws, covering inheritance. Taxes collected would be used to finance AVS, the social security and pension fund that, the government has warned, will be operating in the red by 2020 if measures are not taken now.
Bern published the full text of the new would-be law 8 January. It stipulates that one-third of the monies collected would go to the cantons, with the rest used to help fund AVS, the social security system.
Its key measures include:
- cantons would lose their competence to collect inheritance and donations taxes
- a fixed rate of 20 percent would be set
- the threshold for taxing inherited assets would be CHF2 million, including donations made while the person was alive
- partners and spouses would be exempt
- gifts of up to CHF20,000 a year per recipient would not be included
- companies and farmers would be given special favourable treatment status.