Vaud would not have respected his own tax on the tax shield

The Vaudois tax shield keeps talking about him following the Dittli affair. Since its introduction in 2009, the cantonal administration would have poorly applied its legislation on this most wealthy tax cap.

The cantonal administration would then have delayed rectifying the shot. Difficult to quantify losses for the State, but potentially tens of millions of francs.

Thanks to the information law, Time was able to obtain two opinions of law of two specialists in tax law, including that of Yves Noël, professor of tax law at the University of Lausanne. It reveals several problems and anomalies in the application of the tax shield, according to a daily survey published Thursday. Contacted by Keystone-ATS, Yves Noël confirmed the information and remarks concerning him published by this media.

As a reminder, the purpose of the tax shield is that the accumulation of cantonal and municipal tax on income and fortune does not exceed a certain percentage of income, in order to prevent taxation from becoming confiscatory. In the canton of Vaud, this rate is 60%.

Would the tax administration then led by Pascal Broulis violated the law in this very technical-legal field?

Less taxed

To summarize, from 2009 to 2021, the Vaudois taxman would not have taken into account all the income for the calculation of the shield, with the consequence that wealthy taxpayers would have been less taxed than they should have been. Time potentially evokes tens of millions of francs who could have escaped the state funds.

A judgment of the 2018 Federal Court should have rectified this poor application of the law quickly, like Geneva which, for example, rectified the shooting after two months already. However, it was only a few months before the departure of the ex-Grand Argentier Pascal Broulis in 2022.

“Between 2008 and 2021, the practice of the Directorate General of Taxation (DGF) in matters of tax shield has not been the subject of any questioning of the various supervisory authorities. Under these conditions, it therefore does not seem possible to speak of ‘error’ or ‘deliberate desire’ not to respect the legal text in view of these numerous controls relating over several years, “replied the DGF to Keystone-Ats.

Alternative vs cumulative system

The question of applying a cumulative system is at the heart of the problem. To determine on what total amount applies to the percentage of 60% of the shield, the Vaudois law in force in 2009 stipulated clearly that it was necessary to consider all the revenues of the taxpayer and therefore also the yields of his fortune (gains, dividends and interests linked to investments).

However for thirteen years, it is an alternative system that prevailed: the 60% was applied either only to income (wages, rents, etc.) or only on the yield of fortune, but not on the two cumulative. In 2018, therefore, the TF confirmed that when the law expressly provides for a cumulative system, it must be applied.

From 2022, another error seems to appear, depending on the notice of law, on how to consider, always in the calculation of the tax shield, the dividends of the shareholders holding a so-called qualified participation (that is to say at least 10% of the capital). The Vaudois taxman took into account 100% of these dividends in his calculation against 70% before, against the principle of double taxation.

Investigation Internal?

“Only an internal investigation would include the initial error on the one hand and its rehearsal over more than a decade on the other hand, as well as the time elapsed between the judgment of the Federal Court and the change of practice involved four years later”, judges Yves Noël in his right opinion of May 1, 2024, commanded by the former minister of Finance Valérie Dittli.

These new elements also shed another light on the conflict between Valérie Dittli and the tax director, Marinette Kellenberger. The latter has retention of information towards her minister, according to the audit commissioned by the Council of State to Jean Studer on dysfunctions within the Department of Finance and Agriculture (DFA).

Following her publication, the centrist minister was withdrawn on March 21 with immediate effect her role as a great Argentière of the canton (finances and taxation). (SDA/ATS)

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