Canton ZH: Changes to the flat-rate tax credit
Tabea Lorenz
The ordinance on the implementation of the flat-rate tax credit was adapted to the new requirements of federal law as of 1 January 2020. On the same date, the Ordinance on cantonal tariffs for calculating the maximum amount up to which a flat-rate tax credit can be granted to natural persons was repealed.
On 13 November 2019, the Federal Council amended the Ordinance on the Lump-sum Tax Credit (SR 672.201) as part of the enactment of the Federal Act on Tax Reform and OASI Financing (STAF; AS 2019 2395). The amendments entered into force on 1 January 2020. The cantonal ordinance on the implementation of the flat-rate tax credit (LS 634.3; ZStB No. 750.1) was adapted to these changes.
In accordance with the provisions of federal law, foreign withholding taxes are no longer credited at a flat rate, but according to the system of normal crediting. In accordance with federal law, the term "flat-rate tax credit" has therefore been replaced by "credit for foreign withholding taxes". In addition, federal law now stipulates that church taxes must also be taken into account when calculating the creditable withholding taxes of legal entities.
Due to the new requirements of federal law, the imputable taxes for the Confederation and the canton and the municipalities must be calculated separately and allocated to the Confederation and to the canton and the municipalities according to actual tax rates or tax amounts. Within the framework of these adjusted specifications, the attributable amount is calculated precisely. The cantonal imputation tariff previously applied to natural persons is no longer required. The Ordinance on Cantonal Tariffs for the calculation of the maximum amount up to which a lump-sum tax credit may be granted for natural persons (LS 634.31; ZStB No. 751.1) has therefore been repealed.
Cf. the communication of the Cantonal Tax Office Zurich of 15 January 2020.
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