Fribourg adjusts direct taxes for bracket creep

Context

TL;DR

• Vote: 97 in favour, 1 against, no abstentions
• The revision of the LICD covers nine aspects
• Tax scales and social deductions are adjusted for bracket creep
• Estimated impact: CHF 29,1 million for the canton

Key facts

• Law → cantonal direct taxes (LICD)
• Decision → amendment voted on Wednesday by Fribourg deputies
• Scope → income tax and wealth tax
• Referendum → rejection of LAFE following last April 26
• Impact → CHF 29,1 million canton; CHF 24,2 million municipalities; CHF 3 million parishes

On Wednesday, Fribourg deputies voted on the amendment to the Cantonal Direct Taxes Act (LICD). The revision, comprising nine aspects, passed with 97 votes in favor and one against, with no abstentions, at the end of a debate described as more technical than political.

The bill includes an addition concerning bracket creep. In the 2026-2028 cantonal finances recovery program (PAFE), the Council of State had decided to forgo offsetting its effects, citing tax losses. Following the rejection of the State Finances Recovery Act (LAFE) at the end of the referendum on April 26, the draft amendment to the LICD was completed. The aim is to adjust tax brackets and social deductions for both income tax and wealth tax.

The financial impact and debate in the chamber

Jean-Pierre Siggen, head of cantonal finances, estimated the tax consequences of the compensation for the canton at CHF 29,1 million. For the municipalities, the indicated reduction is CHF 24,2 million, while for the parishes it reaches CHF 3 million.

PS deputy Armand Jaquier had submitted an amendment not to adjust the wealth-tax brackets, justifying it on grounds of tax fairness. The proposal was rejected by 63 votes to 35, with 3 abstentions. The amendment called for eliminating the correction and introducing a rate of 3,7 per mille, instead of 2,9, for wealth exceeding one million.

The bill also includes the introduction, at cantonal level, of amendments to federal legislation on the taxation of telework in an international context. Claude Brodard, PLR deputy and president of the Finance and Management Committee, also indicated the extension of the interconnection between the residents’ register and the taxpayers’ register of the Cantonal Tax Authority (SCC), through the cantonal reference register.

The draft amendment also introduces clarifications on cases in which the place of taxation is uncertain or contested at municipal level and on taxpayers’ obligations in the real estate gains tax procedure. The text provides for the possibility of filing the return online on the State of Fribourg portal, a provision enabling the SCC to carry out automated assessments and, finally, the implementation of the motion under which, in real estate sales, a guarantee will be withheld by the notary from the sale price to ensure payment of the real estate gains tax.

Operational details

What changes for those who need to assess their tax position

The amendment does not affect just one element of taxation. The text brings together income tax and wealth tax and, for both, provides for the adjustment of tax scales and social deductions to account for the effects of bracket creep. For those assessing their own position, the practical point is to distinguish the income base from wealth and take into account the deductions provided for by the measure, rather than looking for a single change applicable to every taxpayer. The figures set out in the bill in fact describe overall consequences for different levels of government, not an individual result.

Wealth and teleworking

The vote on Armand Jaquier's amendment also left the adjustment relating to wealth in the bill. His proposal sought to exclude the wealth tax scales from the adjustment and change the rate for wealth above one million; the rejection of the amendment makes clear which solution was not accepted. For taxpayers, wealth therefore remains a component expressly included in the measure.

Teleworking in an international context is addressed separately. The amendment incorporates at cantonal level the changes already introduced by federal legislation. The update to the LICD on this point concerns the regulatory framework for teleworking, separate from the adjustment for bracket creep and social deductions.

Data and place of taxation

The interconnection between the residents' register and the SCC taxpayers' register concerns linking data through the cantonal reference system. It is an operation distinct from the adjustment of the tax scales. Separately, the reform adds clarifications for cases in which the place of taxation is uncertain or disputed at municipal level. These are distinct administrative aspects and should not be confused with the tax calculation.

In preparing dichiarazione delle imposte, it is therefore advisable to keep separate the calculation for income and wealth, international teleworking, SCC data, and the place of municipal taxation. This structure is the main practical effect apparent in the text: the LICD is updated on several fronts, not through a single rule.

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Key points

How to use the applicable provisions

The approved amendment requires separating the calculation phase, the filing phase and the real estate procedures. A practical approach, faithful to the text, starts with the subject matter and leads to the indicated administrative channel.

1. Identify the subject matter

For income and wealth, the reference is the adjustment for bracket creep. The review therefore concerns the two categories specified by the LICD and the related social deductions. For teleworking in an international context, the reference is instead the cantonal incorporation of changes to federal legislation. The two areas remain distinct in the reading process.

2. Use the prescribed digital channel

The draft amendment to the LICD provides taxpayers with the possibility of filing their tax return online through a service on the State of Fribourg portal. This is the digital channel explicitly indicated in the amendment. In the same package, one provision allows the Cantonal Tax Service to carry out automated assessments. The operational distinction is therefore between online filing and automated assessment: the former is a method of submission, while the latter is a possibility granted to the SCC.

3. Handle special cases

When the place of taxation is uncertain or disputed at municipal level, the revision introduces specific clarifications. The same applies to the taxpayer’s obligations in the real estate gains tax procedure. In the event of a sale of real estate, the measure described provides for a guarantee to be withheld by the notary from the sale price, to ensure payment of the real estate gains tax.

4. Distinguish data and calculation

The planned connection between the residents’ register and the SCC taxpayers’ register runs through the cantonal reference system. It is therefore a change to data interconnection, separate from the adjustment of scales and deductions. To supplement your reading of the measure with an income check, use calcolatore imposte. For a brief comparison of income, consult calcolatore stipendio.

Source: latele.ch