DBG change put on ice due to coronavirus

Due to the "extraordinary situation" to combat the coronavirus, the referendum scheduled for May 17, 2020 will not take place. This also affects the amendment to the Federal Act on Direct Federal Tax (DBG) regarding the tax consideration of third-party childcare costs.

Proposed Amendment

The planned amendment of the Federal Act on Direct Federal Taxes (DBG) aims to counteract the shortage of skilled workers in Switzerland and to improve the compatibility of work and family life. This goal is to be achieved by increasing the tax-deductible amount for third-party childcare costs. The allowable deduction per child is to be increased from 10'100 CHF to 25'000 CHF. This enhancement of childcare services and nursery places is particularly intended to motivate well-educated women to take up employment.

Referendum Initiated

The amendment under discussion was decided on September 27, 2019. The SP (Social Democratic Party) has initiated a referendum against the proposal, which came about on January 27, 2020. For this reason, the impending amendment was to be brought to a vote on May 17, 2020. The SP criticizes that families with low incomes would not benefit from the proposal. The GLP (Green Liberal Party) and the Greens also reject the amendment on the grounds that only the wealthiest families would benefit. This is because 250 million of the 350 million in tax revenues lost due to the higher deduction come from households with a gross income of over 150,000 CHF.

Postponement Due to Coronavirus

The Federal Council decided on March 18, 2020, that the referendum scheduled for May 17, 2020, will not proceed as planned. Therefore, the votes on the limitation initiative, the amendment of the hunting law, and the DBG amendment concerning the tax consideration of third-party childcare costs will take place at a later date. It is still unclear when this will be. The Federal Council has announced that it will decide by the end of May 2020 whether the next referendum of September 27, 2020 will take place and which proposals will then be decided upon.

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