Citation: Stephanie A. Brawand, Taxation of spouses in international relationships - Federal Supreme Court ruling of September 23, 2024 Prejudice on tax separation issues, in zsis) 1/2025, A2, N [...] (publ.zsis.ch/A2-2025)
In its ruling of September 23, 2024, the Federal Supreme Court resolved the long-standing dispute regarding the tax allocation of debts and interest on debts for internationally married couples—that is, where one spouse is a taxpayer subject to unlimited tax liability in Switzerland, while the other spouse is resident abroad for tax purposes and thus has no tax affiliation with Switzerland. It reaffirms its long-standing case law that the aggregation of factors stipulated in Art.
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In its ruling of September 23, 2024, the Federal Supreme Court resolved the long-standing dispute regarding the tax allocation of debts and interest on debts for internationally married couples—that is, where one spouse is a taxpayer subject to unlimited tax liability in Switzerland, while the other spouse is resident abroad for tax purposes and thus has no tax affiliation with Switzerland. It reaffirms its long-standing case law that the aggregation of factors stipulated in Art. 9 para. 1 DBG neither establishes a tax liability for the spouse resident abroad nor justifies joint taxation of the spouses.
If only the spouse resident in Switzerland is the debtor of the mortgage, these constitute part of his or her tax base, provided that he or she does not hold any assets abroad. An allocation of the debts and interest on the debts to the income and assets of the spouse resident abroad is not permissible. The tax factors of the “foreign” spouse are to be taken into account solely for the purpose of determining the tax rate.
The re-examination of the case law in effect since the ruling of March 20, 2023, regarding the international allocation of maintenance payments made by a spouse subject to unlimited tax liability in Switzerland to the divorced spouse is to be welcomed: The criticism in legal scholarship, according to which a resident person is denied part of the deduction for alimony payments because the factors of the non-resident spouse were taken into account in the tax allocation, has been heeded. If the taxpayer has no foreign income, there must be no reduction in alimony payments by partially allocating them abroad for taxation.
What does this precedent mean in practice? How should cases be handled where the spouse subject to unlimited tax liability in Switzerland has a secondary tax domicile abroad? What does the tax allocation look like if the spouse residing abroad owns a vacation property in Switzerland and is therefore subject to limited tax liability in Switzerland? And how should cases be handled in which the “foreign” spouse financially supports the spouse subject to unlimited tax liability in Switzerland? The author analyzes these practical questions and proposes solutions.
1. Judgment of the Federal Supreme Court of September 23, 2024
1.1 Facts
Taxpayer A. was subject to unlimited tax liability in the canton of Basel-Stadt for the 2017 tax year by virtue of residence. Additional secondary tax domiciles existed in various cantons due to real estate ownership. The latter were financed with external funds. Taxpayer A. made six-figure alimony payments to his divorced wife. Taxpayer A was not subject to taxation abroad. In May 2017, he married his partner, who
