On 9 June 2024, around 57% of voters in the Canton of Ticino approved the long-awaited tax reform. The new provisions will enter into force retroactively from 1 January 2024. They take into account the changed socio-economic conditions and will increase the attractiveness of the Canton of Ticino in an inter-cantonal comparison.
The main changes to the tax reform include the following measures:
Maximum income tax rate is reduced
Until the end of last year, the Canton of Ticino was one of the six most expensive cantons for high-income taxpayers. With retroactive effect from 1 January 2024, the maximum income tax rate will be reduced from 15.076% to 13.25% and will gradually fall to 12% over six years. This measure is intended to improve the canton’s tax competitiveness and to keep high-income taxpayers in the canton.
In addition, income tax rates will be reduced by 1.667% for all taxpayers.
Lower estate and gift tax
Estate and gift tax rates will be reduced to reflect new family structures and to encourage business succession. For example, the rate for transfers to life partners will be reduced from 41% to 15.5% and for transfers to non-relatives from 41% to 35%.
Inheritance or gift tax will be reduced by 50% on the transfer of business assets located in the Canton of Ticino or of a shareholding of at least 51% in a company with legal seat in Ticino to a person with a management position in the company, provided there is no sale or relocation of the business activity outside Ticino.
Reduced cantonal tax rate on capital withdrawal from the pension fund
In an inter-cantonal comparison, Ticino was one of the least attractive cantons for taxing pension fund’s capital withdrawal of CHF 1 million or more. From 1 January 2024, the maximum tax rate in the Canton of Ticino will be reduced to 3%.
Conclusion
The adopted tax reform is a response to national and international developments in the field of taxation. The measures that have entered into force promise tangible benefits for taxpayers in Ticino, modernise the tax system and improve the canton’s competitiveness.
This applies not only to individuals domiciled in the Canton of Ticino, but also to those who have a limited tax liability in the Canton of Ticino, e.g. own real estate in the Canton.
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