k-flash audio commentJUSO Initiative: There is no rush - the 50 % estate tax cannot be levied, as it is unconstitutional
k-flash audio commentJUSO Initiative: There is no rush - the 50 % estate tax cannot be levied, as it is unconstitutional

The case

The Young Socialists’ initiative proposing a 50% federal estate tax on estates exceeding CHF 50 million is scheduled for a nationwide vote on 30 November 2025.

Source: Olivier Weber

The commentary

Legal vacuum: No definition as to who is subject to tax!

Under the current Swiss constitution, the initiative as drafted cannot be implemented. Specifically, it fails to define the subject to tax – a basic constitutional requirement. According to the principle of legality (abgaberechtliches Legalitätsprinizp), a tax norm must define in its wording who is liable to tax (subject). This definition must be found either in the constitutional text itself or in a formal law.

As things stand, even if the initiative was adopted, the estate tax could not be levied before a formal estate tax law was introduced by the Swiss Parliament. Such new law might by subject to another popular vote, so it is not very likely to enter into force before 2030.

The text of the initiative refers only to the “estate of the individual” as the subject to tax. Practically, this means the tax is levied on the estate (object) of a deceased person (subject). However, under Swiss law, a deceased person cannot be the subject to tax since they no longer hold legal personality.

The initiative does not specify any other subject such as heirs, recipients or legal representatives. In the absence of a defined subject, no tax liability can arise, and any attempt to collect such a tax would breach constitutional safeguards. Until this fundamental legal gap is addressed through formal legislation, the tax is unassessable and unenforceable.

Consequences:

No immediate applicability: The initiative, even if adopted, could not be enforced in practice prior to the implementation of a new legislation passed by Parliament, a process likely to last five to seven years, and which would probably be subject to yet another referendum.

No tax claims can be raised: In the absence of a clear subject of tax, no valid tax assessments can be issued or collected.

No retroactive effect or anti-avoidance measures: Since the tax itself is currently unconstitutional, any attempt to apply it retroactively or to impose anti-avoidance mechanisms (e.g. an exit tax) is equally unconstitutional. The Federal Council has already rejected such measures, citing both constitutional principles and international law constraints.

Strong procedural position of the heirs: The right to be taxed only if the tax norm complies with the constitution is self-executing. Thus, the heirs have the constitutional right to reject any assessment of the estate tax.

Any person possibly exposed to the consequences of the initiative is advised to contact a qualified tax expert.

This publication has been prepared solely for information purposes and is does not constitute a recommendation, a solicitation, or an offer. The information on which this publication is based has been obtained from sources that we believe to be reliable and in good faith, but we have not independently verified such information and no representation or warranty, express or implied, is made as to its accuracy. All expressions of opinion are made as of the date of publication and may be subject to change without notice. k-flash and all related affiliates accepts no liability or responsibility whatsoever for any consequential loss of any kind arising out of the use of this publication or any part of its contents. The use of this publication should not be regarded as a substitute for the exercise by the recipient of his or her own judgment. This publication is not directed to any person in any jurisdictions that prohibit such publication.