Legal Foundations and Imperatives of the Functioning of the Swiss Confederation’s Tax System

Abstract

Relevance. In the context of increasing globalization of financial relations, growing capital mobility and the expansion of international economic interactions, the legal regulation of tax systems acquires not only fiscal but also constitutional significance. In federal states, the issue of allocating tax jurisdiction between different levels of public authority becomes particularly complex, requiring a balance between financial autonomy of territorial entities and the unity of national tax policy. The Swiss Confederation represents a distinctive model of tax federalism in which tax sovereignty is constitutionally distributed among the Federation, cantons and communes.

Purpose. The purpose of the study is to analyse the legal foundations and constitutional imperatives of the functioning of the tax system of the Swiss Confederation, with particular attention to the concept of tax sovereignty as a mechanism for allocating tax jurisdiction and ensuring coherence of the federal tax system.

Methodology. The research is based on a combination of comparative legal, formal legal and systemic methods. Constitutional-legal analysis is applied to examine the distribution of tax sovereignty between levels of public authority. Doctrinal analysis of Swiss tax law scholarship and case-law analysis of the Federal Supreme Court’s decisions are used to assess the mechanisms of tax harmonization and the constitutional prohibition of inter-cantonal double taxation. Elements of comparative financial law are employed to evaluate the broader legal significance of the Swiss model.

Results. The study demonstrates that in Switzerland tax sovereignty functions as a constitutional category of public authority rather than merely a technical distribution of competences. The mechanisms of tax harmonization, the constitutional prohibition of inter-cantonal double taxation, and judicial interpretation play a decisive role in preserving the integrity of the national tax system while maintaining substantial financial autonomy of cantons and communes. The Swiss model of tax federalism illustrates how regulatory coordination and constitutional constraints can prevent fragmentation of tax jurisdiction. The research also highlights that the functioning of the Swiss tax system is closely connected with international tax obligations, including the implementation of OECD standards and the conclusion of double taxation agreements. The findings confirm the relevance of the Swiss experience for comparative financial law and its potential significance for improving the legal regulation of tax relations in Ukraine.