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Switzerland adjusts tax rates to overcome fiscal drifts
By TII News Service
Sep 16, 2011 , Geneva |
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TO manage the effects of recent fiscal drift,
Switzerland has adjusted the Confederation’s
direct federal tax rates and deductions for the 2012 tax year.
Commenting on the decision, the Swiss federal administration has explained
in its release that the measure is designed to ensure that the fiscal burden
on taxpayers in Switzerland does not increase as a result of inflation.
As regards tax deductions, the administration states that for the 2012 fiscal
year, double income couples will be able to deduct up to CHF13,400 (EUR11,130)
from their taxable income (compared to CHF13,200 or EUR10,963 currently). Tax
deductions for children and for dependents will increase from CHF6,400 currently,
to CHF6,500, while for every child under 14 the maximum deduction accorded
for child care costs paid to a third party will increase to CHF10,100 (compared
to CHF10,000 currently), the administration adds.
Fiscal drift occurs when the government fails to adjust marginal income tax
brackets in line with wage inflation, meaning more taxpayers are dragged into
the higher income tax bands and thus suffer a tax increase.
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