Taxes and causal charges – What is the difference?

The Swiss municipalities are familiar with countless fees, charges, and taxes. Terms that are often equated in everyday life involve important legal distinctions.

Swiss citizens are confronted with numerous fees, charges, and taxes. While these terms are commonly used synonymously in everyday language, they serve relevant distinctions from a legal perspective.

Jungle of Public Charges

The umbrella term of public charges encompasses all financial contributions to the community. The most important types of public charges are causal charges and taxes.

Causal Charges

Causal charges are understood as payments for a service provided by the state that can be attributed to the individual. The person who makes the causal charge receives a direct counter-performance from the community in exchange for their payment. Causal charges are further subdivided into:

• Fees: Payments for specific services provided by the state on behalf of a citizen. While administrative fees are incurred for carrying out an official act (e.g., trade register or land register fee), the use of a public facility or asset must be compensated through a usage fee (e.g., garbage collection fee);
• Preferential Charges: Payments for special economic benefits (e.g., property owner contribution); and
• Substitute Charges: Payments that serve as a substitute for natural services (e.g., fire service substitute charge).

Taxes

In contrast to causal charges, taxes are incurred without a counter-performance. The taxed individual does not receive a directly attributable benefit from the community for their payment. Of course, taxpayers indirectly benefit from the infrastructure provided by the state. Within the umbrella term of taxes, numerous subcategories are distinguished. The most important distinction is that between:

• General Taxes: Payments that serve to cover general financial needs (e.g., income and wealth tax); and
• Purpose Taxes: Payments that serve to finance specific tasks (e.g., gambling tax).

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