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Swiss government increases federal tax deductions to account for inflation

Summary:
Now that inflation has returned, so has bracket creep, a situation where inflation pushes taxable income into higher tax brackets and reduces the tax busting value of deductions. To compensate, Switzerland’s federal government announced higher deductions and higher tax brackets this week. Photo by Pixabay on Pexels.comFrom the 2023 tax year couples with two wage earners will be able to deduct a maximum of CHF 13,600 (previously CHF 13,400) each from their taxable income. For married couples federal income taxes will kick in from taxable income of 28,800 francs (previously 28,300 francs). The child deduction will also increase to CHF 6,600 each (previously CHF 6,500), and the maximum rate will be applied from a taxable income of CHF 912,600 (previously CHF 895,900). In

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Now that inflation has returned, so has bracket creep, a situation where inflation pushes taxable income into higher tax brackets and reduces the tax busting value of deductions. To compensate, Switzerland’s federal government announced higher deductions and higher tax brackets this week.

Swiss government increases federal tax deductions to account for inflation
Photo by Pixabay on Pexels.com

From the 2023 tax year couples with two wage earners will be able to deduct a maximum of CHF 13,600 (previously CHF 13,400) each from their taxable income.

For married couples federal income taxes will kick in from taxable income of 28,800 francs (previously 28,300 francs).

The child deduction will also increase to CHF 6,600 each (previously CHF 6,500), and the maximum rate will be applied from a taxable income of CHF 912,600 (previously CHF 895,900).

In addition, a maximum deductible of CHF 3,200 (previously CHF 3,000) will be allowed for the cost of getting to and from work.

In a climate of rising prices, a small saving in tax, which is for many their largest expense, will be welcome – a report in 2022 showed 21% of an average income was spent on taxes.

The last time the federal government adjusted these amounts was in 2012.

More on this:
Government press release (in French) – Take a 5 minute French test now

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