Swiss professors attack tip exemption as 'vehicle for black money'

A group of 13 professors specializing in labor and social security law has strongly criticized a recent decision by the Swiss Council of States to exempt tips from taxes and AHV contributions. They argue the move is "unconstitutional" and could have severe social consequences, potentially opening the door for misuse by other professions.

The debate over the taxation of tips has gained traction as Switzerland moves towards a cashless society. With more tips being paid via card or mobile payment apps like Twint, these amounts are increasingly appearing in official accounting records. This has brought to the forefront the question of how these often substantial sums, which can constitute up to 40 percent of an employee's income in the gastronomy sector, should be treated.

While the Federal Office of Social Insurance's guidelines state that tips are considered income and should be included on the salary statement if they represent a "significant portion of the wage," the definition of "significant" remains ambiguous in practice. This ambiguity has allowed many employees to avoid paying taxes and AHV contributions on their tips.

Social Minister Elisabeth Baume-Schneider had previously signaled the government's intention to tap into tip revenue to bolster the AHV, estimating potential annual gains of 20 to 50 million Swiss francs. However, before the Federal Council could act, parliament intervened with a motion to exempt tips in the gastronomy sector, a move now facing significant legal and academic opposition.

“

If a parliament decides on nonsense, you have to point it out.