Individual Taxation in Switzerland: What May Soon Change

The Swiss tax landscape is facing a historic shift. With the planned introduction of individual taxation, the current joint taxation system for married couples could be replaced by 2026/27. This step would not only change tax practice but also have far-reaching consequences for families, employees, and the economy as a whole.

What Does Individual Taxation Mean?

Until now, married couples in Switzerland have filed a joint tax return. Both partners’ income and assets are combined and taxed together – a system known as joint taxation.

Individual taxation would replace this model:

• Each person – regardless of marital status or living arrangement – would be taxed individually.
• Married spouses would need to file separate tax returns.
• Income, deductions, and assets would be assessed on an individual basis.

This would establish tax equality between married and unmarried couples.

Objectives of the Reform

Elimination of the “Marriage Penalty”

Currently, married couples with uneven incomes often pay significantly more tax than unmarried couples. This so-called “marriage penalty” would be abolished, paving the way for greater tax fairness.

Encouraging Workforce Participation

Second earners, often women, would benefit in particular. Since their income would no longer push the couple’s total into a higher tax bracket, taking up or expanding employment would become more worthwhile. This also contributes to addressing the shortage of skilled workers.

Reflecting Modern Family Models

The tax system should better reflect today’s realities: blended families, cohabiting partners, and single parents would all be treated equally under individual taxation.

How Would Individual Taxation Affect Taxpayers?

Tax Returns

Every taxable person would submit their own tax return – including married spouses. While this means more administrative effort, it also creates greater transparency.

Tax Burden

• Dual-income couples and families would benefit, as progressive rates would apply to each income separately.
• Single-income couples could face a higher burden, as the sole income would no longer be reduced by spousal deductions.

Economic Effects

Studies suggest the reform could significantly increase labor supply. Estimates indicate that better incentives for second earners could generate up to 45,000 new full-time jobs.

Controversies and Political Process

Political Debate

The reform is politically controversial. Supporters emphasize fairness and equality, while critics warn of higher tax burdens for traditional single-income families.

Referendum and Popular Vote

A referendum has already been announced. It is therefore highly likely that the Swiss population will vote on the introduction of individual taxation in 2026.

Timeline and Implementation

• 2026: Popular vote on the reform.
• From 2027: Expected introduction of individual taxation at the federal level, if approved by voters.

Conclusion: A System Change with Far-Reaching Impact

The introduction of individual taxation would be one of the most significant reforms in Swiss tax law in decades. Millions of taxpayers would be directly affected. While dual-income households and modern family models would benefit, single-income couples could face higher tax burdens. What is clear: this debate will shape Switzerland in the coming years, and it’s worth keeping a close eye on developments.