Published: March 10, 2024

Swiss Parliament wants to change taxation of high gambling winnings

In future, gambling winnings of one million francs or more should always be taxed where the winner lived at the time of the win. Parliament has spoken out in favor of this.

On Wednesday, the National Council voted 96 to 88 with 2 abstentions to refer a motion by former member of the Council of States Roberto Zanetti (SP/SO) to the Federal Council. The SP, Center Party, Greens and GLP voted in favour by a majority and prevailed over a minority of the SVP and FDP.

The majority argued that there was a loophole in the Tax Harmonization Act. For example, anyone who wins a large lottery prize on January 2 of a year and moves to another canton on December 30 of the same year would pay tax on this prize in their new canton of residence.

In particularly spectacular cases, municipalities and cantons lost out on millions, even though they had provided lottery winners with infrastructure and services on 364 days of the year in question. This is due to the principle laid down in the law that the place of residence at the end of the year determines where taxpayers have to hand over their money.

Council of States unanimously in favor

It is true that the Tax Harmonization Act already contains a provision on exemptions for special circumstances. However, only lump-sum payments from pension funds and payments in the event of death and for permanent physical or health-related disadvantages have so far been exempt from this end-of-year principle.

This exemption should be extended to large lottery or gambling winnings, according to the tenor in parliament. The Council of States adopted the motion without opposition. The Federal Council also supported the demand.

The gap can probably be explained by the fact that lottery winnings in the millions used to be extremely rare, said motionary Zanetti in the First Council. Today, however, there is always talk of jackpot winnings in the two or even three-digit million range. A change in the law would create "a little more fairness". "Where people consume, they also pay."

Opponents against encroachment on tax sovereignty

Opponents of the new rules pointed in particular to the additional administrative workload that the cantons would incur as a result of the necessary coordination - for only around twenty to thirty cases per year across Switzerland. In addition, the cantons could already intervene today in the event of tax evasion.

In implementing the motion, harmonization between the cantons is also being sought, which represents an encroachment on the cantons' tax sovereignty, the minority argued. When implementing the motion, it is now calling for lottery or gambling winnings to be taxed separately in a similar way to capital benefits from pensions.

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