Government Policy and the Nonprofit Sector: Switzerland - VMI

Nollert and Budowski Government Policy and the Nonprofit Sector: Switzerland
to donations made. The cantons of Berne and Grison (Graubünden) are currently revising their tax laws, both
aiming at a 20 percent tax deduction for donations to welfare organizations.
Presently, there are efforts to harmonize the level of deductible contributions to political parties across
Switzerland to 10,000 CHF because, unlike in countries such as Germany, they do not receive any financial
support from the state. The reason for the proposal is that in contrast to the Federal government, 15 cantons
allow deductions for membership fees and donations. The state political commission of the Council of States, 29
supported by the majority of cantons and all political parties, submitted such a proposal for consultation.
Although Federal councilor Eveline Widmer‐Schlumpf argued that the proposal would undermine the objective
of a more simple tax system, the Council of States eventually supported the proposal with 36 to 4 votes in
September 2008. In their spring session in 2009 the National Council also approved of the proposal.
In contrast to tax deductions regarding donations, all previous attempts to provide other tax advantages to
volunteers have failed. This is due to the opposition of the Swiss People’s Party (SVP), the Liberal‐Democratic
Party (FDP), and elements of the Christian Democratic People’s Party (CVP) (e.g. as in 2004 in Zurich).
Nonetheless, some cantons plan to allow volunteers to also deduct out‐of‐pocket expenses. In Zurich, a
deduction of 1000 CHF from taxable income is legal since 2007.
3. Incentives for the Formation and Operation of Organizations
At the moment, the Swiss government does not offer any explicit encouragements for most NPOs similar to
those offered to donors and volunteers, though there are some tax incentives offered to international
organizations and foundations. Both categories profit from low taxation in Switzerland in all cantons; in addition
foundations also profit from the inter‐cantonal tax competition. Indeed, despite political attempts to advantage
organizations in terms of tax deductions, many NPOs are facing new restrictions as outlined in the next section.
4. New Restrictions
The state’s predominantly positive appraisal of NPOs has to date prevented any major legislative intervention.
However, as mentioned above, there are political forces that would like to see the influence of associations
limited. It is therefore quite possible that sooner or later restrictive proposals will come into force. The plan to
abolish the Federation Complaint Right has been the subject of lively debate, for example. Some proponents in
liberal circles (in particular from the Liberal Democratic Party (FDP)) have gone so far as to suggest constraining
the constitutional rights provided by an initiative and referendum, which would considerably weaken the
influence of associations. They claim that many associations misuse their influence in order to hinder economic
progress, especially where the private sector is concerned.
Interactions between public authorities and NPOs have been restricted in new ways recently, although none of
these restrictions threaten the future existence of NPOs. For example, some political actors have called for
subsidies to NPOs in the social sector to be subject to service agreements or that NPOs should be subject to a
binding recommendation to rely heavily on donations and sponsors. The introduction of new management
29 Staatspolitische Kommission des Ständerats
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