Taxation of spouses in international relations - tax segregation issues

If spouses live in a legally unseparated but locally separated marriage, i.e. if only one spouse is subject to unlimited tax liability in Switzerland qua subjective affiliation, while the other spouse has no tax affiliation in Switzerland and is resident abroad for tax purposes, the question of the specific basis of assessment arises within the framework of the legally standardized "factor addition". The starting point is the international tax segregation: On the basis of the tax segregation, the taxable factors are to be distributed among the corresponding tax domiciles in Switzerland (intercantonal and communal) and abroad (international). This ensures that all tax domiciles bear a proportionate share of the debts and deductions on the taxable assets and income allocated to them. This is in line with the principle of taxation according to economic capacity. However, if the tax factors of the spouse residing abroad are included in the tax segregation for the domestic tax base without the spouse residing abroad establishing a tax nexus in Switzerland, the general deductions, organic deductions and social deductions of the domestic spouse are proportionally transferred abroad (to the factors of the spouse residing abroad). This leads to an increase in the domestic tax base. If the assessment authorities and court instances distribute the deductions of the domestic spouse to the income and assets of both spouses, they fail to realize that Art. 9 DBG and Art. 3 para. 3 StHG cannot establish joint spousal taxation in international relations and thus also joint assessment. The legally standardized "factor addition" in the case of legally inseparable "international" spouses serves solely to determine the applicable tax rate. The assessment authorities argue that the aforementioned considerations are solely intended to avoid transferring debts and debt interest (and thus also general deductions and social security deductions) abroad. There is no supreme court case law on this point. The following article will show why this statement is legally untenable and why the question of tax segregation in the case of international spouses is not one of "factor addition" but solely one of correct application of the law, using concrete examples and criticizing the current case law of cantonal authorities.