October 2014

The lump-sum taxation has been a subject of debate in Switzerland for a number of years. Two initiatives aiming at the abolition of such taxation regime have been filed in 2012, resp. 2013, at a Federal level as well as in the canton of Geneva. In Geneva, the City Council has referred the case to the tax commission in order for the latter to develop a counter-initiative. Such counter-initiative proposes to maintain the lump-sum taxation regime, but to tighten the eligibility criteria for benefitting from such a regime, and to increase the minimum allowed amount forming the tax base. The Swiss population, as well as the canton of Geneva will be called to vote on these initiatives on November 30, 2014. The purpose of the present memorandum is to present the proposed modifications to the lump-sum taxation regime on the Federal level (I), as well as on the cantonal level in the light of the contents of the initiative and counter-initiative (II); moreover, the present memorandum briefly describes the different stages of the modification (III) and finally explains the various consequences of such modification (IV).