In Switzerland, the value by which the simple cantonal tax is multiplied in order to determine the cantonal taxes owed is referred to as the applicable cantonal tax quota (German: kantonaler Steuerfuss or kantonale Steueranlage, French: coefficient de l’impôt cantonal or quotité de l’impôt cantonal).
Applicable cantonal tax quotas may be shown as percentages or as decimals. If an applicable cantonal tax quota is lower than 100% or 1, the actual cantonal tax owed corresponds with the simple cantonal tax.
Example of an applicable cantonal tax quota as it relates to cantonal income tax
Income taxable in the municipality: CHF 70,000
Tax rate as per cantonal tax schedule: 5.18%
Simple cantonal tax: 5.18% * 70,000 = CHF 3626
Applicable cantonal tax quota: 110% (or 1.1)
Cantonal tax: 110% * 3626 = CHF 3988.60
Separate applicable cantonal tax quotas apply to income and wealth taxes for individuals, and to profit and capital taxes for legal entities.
Not all cantons use the "roundabout" method of calculating taxes using applicable cantonal tax quotas. The cantons of Ticino and Valais use tax schedules which are directly applied to taxable income. The Canton of Basel-Stadt only uses an applicable cantonal tax quota for the taxation of income. A number of additional cantonal exceptions exist which affect the way in which profit and capital taxes for legal entities are calculated. Whether or not an applicable tax quota is used in tax calculations does not affect the size of taxes or tax progression.
The main arguments in favor of the use of applicable cantonal tax quotas is the greater flexibility provided by this method of tax calculation. The argument is that cantons can quickly respond to economic changes by simply increasing or decreasing applicable cantonal tax quotas. The changing of applicable cantonal tax quotas is a political process and must be decided on by taxpayers via referendum in most cantons.
More on this topic:
Applicable municipal tax quotas explained
Swiss federal income tax calculator
