Vaud: the right revives the tax shield

Context

TL;DR

• The right is relaunching the 2024 tax shield revision.
• The 2022 version should continue to apply.
• Vote: 76 yes, 57 no and one abstention.
• The left announces a referendum.

Key facts

• When → Tuesday
• Popular initiative → 12%, yes on September 27th
• Expected application → fiscal bouclier of 2022
• Motion from the right → resume the changes of 2024
• Voting → 76 in favour, 57 against, 1 abstention
• Appeals → 300 against the 2022 revision
• Beneficiaries → approximately 3000 taxpayers
• Another motion → referral to committee

The Grand Conseil of Vaud reopened the dossier of the fiscal bouclier on Tuesday. The right-wing majority approved a motion by FDP Marc-Olivier Buffat calling for the main changes of the revision launched at the end of 2024 to be resumed. However, the reform was linked to a precise condition: it would only come into force if the 12% popular initiative was rejected.

On September 27th the yes to the initiative prevailed. As a result of the guillotine clause, the 2024 revision has become lapsed and the 2022 version of the fiscal bouclier should continue to apply. The motion approved by the right therefore aims to reopen that review, despite the outcome of the popular vote.

The Vaud tax shield aims to prevent the tax from becoming confiscatory. Its recent history includes an illegal application between 2009 and 2021, a revision for 2022 and a new revision at the end of 2024. The 2022 version had been challenged by wealthy taxpayers who saw themselves as being taxed too much.

According to Buffat, that version had created unacceptable side effects and had generated 300 appeals. The deputy argued that legal security must be guaranteed and the approximately 3,000 taxpayers who benefit from the bouclier must be prevented from being forced to leave the canton.

Cédric Weissert, UDC group leader, defined the current situation as unsustainable. In his opinion, some wealthy taxpayers pay taxes beyond what is reasonable; the revision, he argued, would not serve to grant fiscal gifts, but to find a fair and pragmatic solution. The income from these people, he added, is very important for cantonal finances.

The vote and the political reaction

Finance Minister Christelle Luisier, on behalf of the Council of State, called for respect for the popular vote. He indicated the passage to the commission as the most suitable route, if the Grand Council still wanted to review the bouclier. The proposal was not accepted: the right-wing majority voted for immediate consideration and for direct sending to the Council of State.

The outcome was 76 votes in favour, 57 against and one abstention. The left reacted harshly. Kilian Duggan, leader of the Greens, accused the right of wanting to protect wealthier taxpayers; the socialist Oriane Sarrasin denounced a double denial of democracy and announced, together with the left-wing parties, a referendum against the legal change.

Operational details

Two paths to distinguish

For those following Vaud tax matters, Tuesday's vote opens up two different levels: on the one hand, the 2022 version remains the reference point; on the other, the right is asking to revive the changes approved in 2024. The distinction avoids treating as already in force a revision that, after the yes vote on the 12% initiative, has lapsed.

Why this step matters

The issue for taxpayers is not merely a preference for a technical formula. Buffat links the 2022 version to 300 appeals and the need to guarantee legal certainty. He also links the request to the risk that the approximately 3000 beneficiaries of the tax shield will be driven to leave the canton. Weissert adds a financial argument: the revenues coming from these people are very important for cantonal finances. These are the political reasons for the motion, not the definitive content of a new set of rules.

The left, by contrast, takes the issue to the ballot box. Sarrasin argues that the population and the Grand Council had voted knowing about the guillotine clause; for this reason, proposing again a tax shield more favorable to wealthy taxpayers would create another hole in the State of Vaud's finances. The announcement of a referendum makes the process contentious, while Luisier has called for the popular result to be respected.

The second motion, presented by Sébastien Cala and referred back to committee, offers a different perspective. The idea is to give greater protection to wealth invested to keep a business going than to wealth derived from assets. The text cites, for the latter category, securities, liquid assets and real estate. The debate therefore also concerns the composition of wealth, not just its size.

Those wishing to make a first personal calculation can use calcolatore stipendio/imposte as a guide, without confusing a simulation with a change that has already entered into force. The political point to watch remains the choice between direct referral to the Council of State and review by the committee: these are the two channels that emerged from the session.

Useful tools to protect your net income

To reduce FX leakage, compare CHF-EUR exchange options and banks for cross-border workers.

Key points

How to follow the dossier

The first practical step is to distinguish the situation described from the developments still required by the motions. After the September 27 approval of the 12% initiative, the 2024 revision became moot as a result of the stipulated clause; the shield in the 2022 version should continue to apply. The motion approved on Tuesday calls for resuming the 2024 changes, but this does not amount to their entry into force.

Five practical steps

1. Separate the texts. Note on one side the motion by PLR Marc-Olivier Buffat, and on the other the socialist motion by Sébastien Cala. The former was taken into consideration immediately and sent directly to the Council of State; the latter was referred back to committee.

2. Verify the subject matter. The proposal from the right concerns the main changes in the 2024 revision. Cala's, by contrast, calls for distinguishing entrepreneurial wealth from personal wealth, with greater protection for wealth invested in running a business. Securities, liquidity and real estate fall into the other category indicated.

3. Keep the arguments separate. On one side are the 300 appeals, legal certainty and the risk that about 3000 beneficiaries will leave the canton. On the other are respect for the popular vote and the left's challenge, which has announced a referendum.

4. Follow the institutional channel. The motion from the right was sent to the Council of State, while Luisier had indicated the committee as the more suitable route. The next update should therefore be read in light of this choice, without presenting as definitive a revision that has merely been revived through a motion.

5. Preserve the temporal distinction. The political reference is September 27 and the outcome of the 12% initiative; the indicated application reference is instead the 2022 version. The late-2024 revision remains the text that the right wants to revive.

To organize their own tax review, readers can consider this information alongside dichiarazione delle imposte, keeping the 2022 reference and the 2024 revision requested by the right separate. The comparison should be read as monitoring of the dossier, not as the automatic application of a new treatment.

For a personal simulation of the tax burden, use calcolatore stipendio/imposte.

Source: latele.ch