commission on fiscal imbalance 合集

Second more and more taxpayers corporate or

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Unformatted text preview: the amounts of deductions and exemptions and the tax rate schedules are identical in all jurisdictions. Such harmonisation is at variance with the federal principle and has never been on the political agenda in Switzerland. In Switzerland, the problem of tax harmonisation arises exclusively for those taxes that are simultaneously levied by the two higher levels of government - federal and cantonal. Despite the new legislation which has entered into force from January 1 2001 after a transitory period of many years, tax harmonisation at the federal and cantonal levels remains fully and exclusively formal. At the cantonal level, formal tax harmonisation has been realised over the years for two reasons. First, collection of the federal direct tax (FDT) on personal income, and on corporate profits and capital is assigned to the 17 18 This has been confirmed by the Federal Court of Justice early in 1999 in a dispute between the cantons of Geneva and Vaud concerning commuters working in Geneva but resident in Vaud who had received income tax assignment from the canton of Geneva. Since tax breaks are used in all cantonal regional development policies, they do not really give a net advantage to one region over another, which results in a typical prisoner's dilemma situation. 77 Commission on Fiscal Imbalance Cantons. Consequently, for obvious reasons of reducing administrative and implementation costs, and thanks to effortminimising bureaucrats who were reluctant to control several Tax Return Forms (at least, the federal and the cantonal Forms) for one and the same taxpayer, there has been very strong bureaucratic incentives at cantonal level to adopt rules and income concepts (gross income, adjusted gross income, taxable income, itemised deductions and allowances) similar to those of the FDT. Second, more and more taxpayers, corporate or individual, are active outside their Canton of residence, or own immovable assets in another Canton, thus pushing for uniformity of the various rules of taxation (none the less for uniform Tax Return Forms) in order to reduce administrative and legal costs. Nowadays, formal harmonisation is partly achieved by federal legislation, introduced in 1993 and 1995: ♦ The federal law on the harmonisation of direct taxation at cantonal and communal levels, which has been in force since 1 January 1993, provides a framework within which the Cantons (and the communes if they have more than fiscal flexibility) must define their direct taxation laws, particularly with regard to tax liability of persons and legal entities, assets and tax periods. Standardised tax declaration forms are being introduced, much to the relief of people liable for tax in more than one canton. The income and wealth taxes are annualised (they were based on a 2-years assessment up to this date). The Cantons have been obliged to adjust their tax legislation within eight years, that is by 31 December 2000. Actually the law applies directly wherever cantonal tax law has not been brought into line with it. However, since the Cantons still define their own tax scales, tax rates and the amounts of allowances and deduction, wide variations in taxation levels within Switzerland r...
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This note was uploaded on 03/06/2013 for the course ECON 220 taught by Professor Paulo during the Spring '13 term at University of Liverpool.

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