Tax debts and marital solidarity for their payment

Both for direct federal tax and for cantonal tax on income and wealth (harmonised law), federal tax legislation stipulates that married spouses living together are indeed two distinct taxpayers, but they file their tax obligations jointly. Linked to this procedural matter is that, concerning tax debts, spouses are jointly and severally liable for their overall payment. Conversely, when one of the spouses living together becomes permanently insolvent, then each spouse is only liable for their own debts.

I first encountered this question of spousal solidarity for tax payments at the very beginning of my career, about twenty years ago. Only the husband generated a tax debt (through his work). The husband passed away in his later years, leaving numerous debts. The wife renounced the succession. The tax authorities wished for the tax debts to be paid by the surviving spouse based on the principle of solidarity. Based on the provisions above and the applicable cantonal legal provisions, the tax authorities eventually admitted the absence of solidarity.

The Federal Court has just delivered a judgment on the theme of the joint liability of married couples living together. The husband had a tax burden of over CHF 250,000 in 2018. In 2021, the couple lived on their AVS and LPP pensions, totalling approximately CHF 12,000 per month. The husband had no assets, with those being held by the wife for a total of less than CHF 500,000 for the couple. The Federal Court ruled that insolvency should be prolonged for the spouses’ joint liability to cease. This was not the case in this matter, as, according to the Federal Court, the 2018 tax debt could be paid over a period of 24 to 36 months. Therefore, it was not a lasting insolvency. Consequently, the joint liability between the spouses remains.

In our opinion, the situation would be different if the husband were to pass away during the period of tax debt repayment. The annuities would cease, and in the absence of assets and in the presence of debts, the estate would be insolvent and likely repudiated by the surviving spouse. There would then be an insolvency of the estate and thus the end of the solidarity between married spouses.

We are unaware of the reason why the 2018 tax burden was so significant, or why the couple's assets were so modest. Underlying this is a sense of financial distress for the couple, who must contend with a substantial tax debt.

Requesting the tax authorities to acknowledge the absence of solidarity is one thing. Other means are also available: (i) staying up to date with tax payments, (ii) making a voluntary payment once the tax liability is estimated (at the latest by the time the annual tax return is filed), (iii) contacting the tax authorities in case of financial hardship to draw up a payment plan that leaves the taxpayer with more than the bare minimum (and avoid the debt spiral), (iv) requesting a tax remission (where the conditions are met).

It appears that in a canton at the end of a lake, most of the cases dealt with by the enforcement office concern tax debts. We now better understand why the tax authorities are particularly attentive to the payment of instalments and regularly remind taxpayers of the importance of staying up to date with their tax payments.

Reference: judgment of 3 October 2023, case 9C_233/2023; an ATF publication is planned; the judgment is in German (case from Zurich).