k-flash audio commentJuso Initiative: We can’t afford to introduce this law
k-flash audio commentJuso Initiative: We can’t afford to introduce this law

The case

In the initiative text one cannot find any definitions of as to who is taxable (subject). Consequently, even if the Swiss population did vote in favour of the initiative, the Federal Council would still be required to issue implementing ordinances within three years* before any inheritance cases could be taxed. Before that has been done, there is no legal ground for any assessments or proceedings. The vote has been scheduled for 30 November 2025.

* The Federal Council lacks the legal basis for amending the constitution as this is the task of the Parliament, which entails that the transition period would be considerably longer, probably six to seven years.

Source: Olivier Weber & today’s NZZ page 1 and 25

The commentary

Legal Consequences: 1. No immediate applicability possible during the transitional phase: see “Case” above. 2. No credible tax claims during the transition: Without legislative clarification, the tax subject remains undefined and incalculable, i.e. authorities cannot legally assert any tax claims, which entails that no revenues can be collected during the transitional period. 3. Restrictions on retroactivity and avoidance measures: The initiative anticipates retroactive measures against tax avoidance (e.g. in the case of emigration). The Federal Council has clearly rejected retroactive treatments such as “Wegzugsteuer”, citing constitutional and international law constraints as such sanctions may only apply prospectively under future legal implementation.

Financial Implications: How Significant Is the Revenue Loss? 1. A commissioned economic study calculated an annual gross revenue potential amounting to around CHF 4 billion, provided the law was fully implemented. Yet, behavioural shifts (primarily migration of high-net-worth individuals) are expected to trigger steep reductions in taxable capital. The estimated net inflow might drop to only CHF 100 – 650 million per year. 2. Simultaneously, Switzerland could be faced with annual shortfalls of CHF 2.8 –3.7 billion* in income and wealth tax revenue as those individuals could leave the country. One economic scenario review suggests that up to 93 % of the taxable base could emigrate, resulting in net losses on all government levels. – * today’s NZZ: CHF 5.5 billion (Uni St. Gallen)

Can Switzerland afford to adopt this estate tax? 1. The initiative is unenforceable during the transition period due to the lack of definitions of tax subject. The equation is simple enough: No legal basis = no revenues. 2. The projected gains are minimal compared to the expected losses: Revenues would be far lower than potential tax base erosion, so instead of yielding billions, such a tax would produce net fiscal deficits because of the loss of other tax contributions. 3. Politically and economically, the proposal introduces significant uncertainty, dampening the trust in Switzerland’s fiscal stability and undermining its economic base.

Without legal clarification and full legislative enactment, the initiative cannot be applied in practice during the transitional period (see Flash of 20 October 2025). Even after full implementation, the massive expected outflows among target taxpayers could more than nullify any tax collection, resulting in net losses for both federal and cantonal budgets.

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

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