Tax deductions

Higher tax deductions for parents in Switzerland from 2023

This week, the Swiss government has set a date for the introduction of more generous tax deductions for childcare.

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From 1 January 2023, parents will be able to deduct up to CHF 25,000 per child in childcare costs from their annual taxable income, reports RTS. Currently, the maximum is CHF 10,100 per child.

The change is the result of a new law that was created in the fall of last year. Only external expenses incurred for the care of children under 14 will be deductible. This change should reduce tax revenue by 10 million francs.

A previous attempt to increase the tax deductibility of childcare expenses was defeated in a referendum in September 2020. The 2020 package, in addition to allowing expense deductions of up to CHF 25,000, included a raising the general child deduction from 6,500 to 10,000. Some believe that it may have been the growing general deductions that led voters to reject the earlier plan.

The 2021 law can no longer be overturned by referendum as the window to do so closed on January 20, 2022.

The higher deductions will make it easier for moderate-income couples to work. Paying childcare costs with taxable income can make work uneconomically viable for some second earners, especially in cantons with high taxes.

However, some couples who have decided to sacrifice one career to focus their firepower on another may feel like they are subsidizing dual income families.

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RTS article (in French) – Take a 5-minute French test now

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