Introduction: why reform is necessary
In Switzerland, married couples are taxed jointly: their incomes are aggregated and subject to a single progressive scale. This system, known as Gemeinsame Besteuerung, has been in force at the federal level since 1958 and results in a systematic tax penalty for couples where both partners work.
The so-called 'marriage penalty' (Heiratsstrafe) affects approximately 700,000 dual-income couples and 370,000 retired couples in Switzerland. For certain income brackets, the additional tax burden compared to an unmarried couple with the same total income can exceed CHF 10,000 per year.
After decades of parliamentary debate and a popular initiative rejected in 2016 (due to incorrect data from the FTA), the Federal Council presented a reform bill providing for a switch to individual taxation. This guide analyses the proposed models, estimated impact and legislative timeline.
The current system: joint taxation
To understand the reform, it is essential to grasp how the current system works and why it creates disparities:
Income aggregation
Spouses' incomes are combined and taxed as a single taxpayer. Due to tax progression, the combined income falls into higher brackets than each spouse would individually occupy — generating a higher tax burden.
Married persons' tariff (Verheiratetentarif)
To partially offset aggregation, a reduced tariff exists for married couples at federal level (splitting factor of 1.8 since 2008) along with specific deductions. However, these corrections do not eliminate the penalty for dual-income couples with similar earnings.
Disparity with unmarried couples
Two unmarried partners (concubines) file separate returns and are taxed individually. With the same total income, they pay less tax than a married couple — a violation of the constitutional principle of equality (Art. 8(1) Federal Constitution).
Disincentive effect
Income aggregation reduces the marginal net income of the second earner (typically the wife), discouraging labour market participation — a particularly problematic effect in the context of skilled labour shortages.
The Federal Supreme Court confirmed in 1984 (BGE 110 Ia 7) that the marriage penalty violates the principle of equality. Despite this, the legislature has yet to find a definitive solution.
Reform models under discussion
The Federal Council and Parliament have evaluated several models. Three have emerged as the main options:
Pure individual taxation (Individualbesteuerung)
Each natural person files their own return and is taxed individually, regardless of marital status. Income and deductions are attributed to each spouse; joint investment income (e.g. imputed rental value) is split 50/50. This is the model chosen by the Federal Council in its 2024 dispatch.
Advantages
Completely eliminates the marriage penalty; incentivises second-earner participation; simplifies international comparison.
Disadvantages
Estimated revenue loss of CHF 1–1.5 billion/year at federal level; single-income couples could pay more without corrective measures; initial administrative cost for transition.
Full splitting (Vollsplitting)
The total income of the spouses is divided by two and taxed at the individual rate; the resulting tax is then doubled. Equivalent to individual taxation where each spouse earns exactly half the family income — but without needing to attribute deductions and investment income.
Advantages
Eliminates the penalty; relatively simple to implement; neutral regarding income distribution within the couple.
Disadvantages
Benefits high-income single-earner couples (the splitting effect is greatest when one partner earns everything); does not incentivise second-earner work; high revenue loss.
Partial splitting (Teilsplitting / variable factor)
Similar to full splitting, but the divisor is less than 2 (e.g. 1.8 or 1.7), thus reducing the levelling effect. Switzerland already applies a factor of 1.8 at federal level. Some cantons use different factors.
Advantages
Reduces the penalty without eliminating it entirely; more contained revenue loss; already partially in force.
Disadvantages
Does not completely eliminate the disparity; the optimal factor is controversial; political compromise rather than systemic solution.
Estimated impact on families
The Federal Tax Administration (FTA) has published simulations on the impact of the various models. Here are the main results for pure individual taxation, based on typical scenarios (direct federal tax):
| Family type | Current tax | With individual taxation | Change |
|---|---|---|---|
| Dual-income couple (100k+80k) | CHF 6,850 | CHF 5,200 | −CHF 1,650 (−24%) |
| Single-income couple (180k) | CHF 6,850 | CHF 8,100 | +CHF 1,250 (+18%) |
| Retired couple (60k+40k) | CHF 1,580 | CHF 1,120 | −CHF 460 (−29%) |
| Unmarried couple (100k+80k) | CHF 5,200 | CHF 5,200 | Unchanged |
Dual-income couples: the main beneficiaries
Married couples where both partners work will benefit from a significant tax reduction, as the income aggregation — which currently penalises them — will be eliminated. The effect is greater the more similar the two spouses' incomes are.
Single-income couples: potential increase
Families where only one spouse works will lose the benefit of the current splitting (factor 1.8). The Federal Council has provided for corrective deductions (e.g. non-working spouse deduction) to mitigate the increase, but the extent will depend on the final version of the law.
Labour market effect
According to estimates by the State Secretariat for Economic Affairs (SECO), individual taxation could increase labour supply by 40,000–60,000 full-time equivalents, primarily through greater female labour market participation.
Revenue impact
The estimated revenue loss is CHF 1–1.5 billion per year for the Confederation and CHF 1.5–2.5 billion for cantons and communes. The Federal Council expects to partially offset this through the increase in economic activity induced by the reform.
Legislative timeline
The legislative path for the reform is long and complex. Here are the key milestones:
June 2024
The Federal Council publishes the dispatch on the switch to individual taxation (chosen model: pure individual taxation). The dispatch includes amendments to the DFTA and the THA.
2025–2026
Parliamentary deliberation in the Committee for Economic Affairs and Taxation of the National Council (EATC-N), then in the National Council and the Council of States. Reconciliation procedure if necessary.
2027 (estimate)
Final parliamentary approval. 100-day referendum period. If a referendum is launched, popular vote in 2027 or 2028.
2028–2029 (estimate)
Development of implementing ordinances. Adaptation of IT systems of cantonal and federal tax administrations. Transition period for taxpayers.
2030 or 2031 (estimate)
Entry into force of individual taxation for the first tax period. Cantons will have a transitional period to adapt their legislation.
Cantonal aspects
The reform will have a different impact in each canton, as each canton has its own rates, deductions and splitting factors:
- Cantons with full splitting (e.g. Obwalden, factor 2.0) will see a smoother transition, as their system already approximates individual taxation in terms of outcome.
- Cantons with low partial splitting (e.g. factor 1.5 or less) will see a greater impact on dual-income couples, with more pronounced tax reductions.
- Cantonal tax revenues will decrease by varying amounts: cantons with a high concentration of dual-income couples (e.g. Zurich, Zug, Geneva) will suffer greater losses.
- Each canton will need to adapt its tax law (THA) and IT systems — a process requiring 2–3 years from the time of federal approval.
How to prepare for the reform
Even though entry into force is expected for 2030/2031, it is useful to start planning now:
Simulate the impact on your household: calculate your current tax and compare it with a simulation where each spouse declares their own income separately. AccountEX offers integrated tax simulation tools.
Re-evaluate income distribution: if one spouse works part-time for tax reasons, the reform could change the calculation — making an increase in working hours worthwhile.
Review pension fund buy-ins and pillar 3a: with individual taxation, deduction limits will be per person (not per couple). This could double pension optimisation opportunities.
Consider asset structure: investment income (rents, dividends, interest) will need to be attributed to the owning spouse. Evaluate whether to rebalance ownership of income-producing assets between spouses.
Stay informed about transitional provisions: the law will include rules for invoices straddling the changeover, loss carry-forwards and multi-year deductions. Follow parliamentary developments.
Practical tips
- The reform is still in the parliamentary phase — do not make irreversible decisions based on a law that has not yet been approved. Monitor progress and prepare for various scenarios.
- If you are a single-income couple, carefully assess the corrective deductions proposed in the Federal Council's dispatch before considering changes to your employment situation.
- For tax advisors: start informing clients and preparing comparative simulation models (joint vs. individual taxation) for the main types of family units.
- Use AccountEX to track the evolution of your tax situation over time and simulate post-reform scenarios with up-to-date data.
- Pay attention to cantonal taxation: the federal reform is only half the equation. Check how your canton intends to adapt.
- For couples approaching retirement: the reform could also affect the taxation of AHV and occupational pension benefits — plan the transition with your pension advisor.
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