Ordinance on Financial Equalization and Burden Sharing of Municipalities - Types of Taxes and Deliverables (§ 7 Paragraph 2 FILAG EG) (FILAV)

1. The state tax revenue of a municipality includes the following types of taxes and levies

a) Income and wealth taxes from natural persons;

b) Profit and capital taxes from legal entities;

c) Personal taxes;

d) Withholding taxes;

e) Real estate capital gains taxes;

f) Additional taxes and tax penalties;

g) Other levies such as expenditure and property taxes as well as public service obligations.

2. Public service obligations are considered voluntary or contractually agreed payments by third parties to the municipality. These include, among other things, payments resulting from special economic benefits that these third parties enjoy due to public facilities.

3. Write-offs on tax receivables may be deducted from the relevant state tax revenue of the municipality based on the approved annual financial statements. Tax receivables recovered through corresponding procedures are considered an increase to the relevant state tax revenue. The department shall determine the specifics through directives.

1. The decisive percentage rate for the disparity equalization (DAQ), determined by the Cantonal Council, is stated in whole percentages.

1. The minimum equipment threshold (MET) of the SKI, as determined by the Cantonal Council, shall be specified in whole numbers.

1. The relevant area of a municipality is determined by the productive area, consisting of the settlement area, agricultural area, and forested area, according to the current data collection of the canton.

2. The relevant road length of a municipality is determined by the length of roads with an access function according to the current data collection of the canton.

1. The Minimum Deviation from the Median Value (mAM) shall be specified to two decimal places.

2. The Maximum Deviation from the Median Value (maxAM) shall be specified to two decimal places.

1. The proportion of recipients of supplementary benefits in a municipality is determined according to the latest data collection by the canton.

2. The proportion of foreign nationals in a municipality is determined according to the latest data collection by the federal government. The composition of nationalities considered in calculating the foreign national rate is decided as part of the determination of the indicators.

1. The proportion of individuals under 20 years of age in a municipality is determined based on the current data collection by the federal government.

1. The minimal deviation from the median value (mAM) is given to two decimal places.

1. The percentage shares of the individual cities are indicated to two decimal places.

1. Eligible to claim are municipality residents who merge or unite with a civic community.

2. The newly merged municipality receives for a period of three years at least those contributions or pays at most those levies that the individual municipalities jointly received or provided before the merger.

1. Entitled to claim are municipal communities that have formally decided to merge with another municipal community and whose structural strength index has a negative value (-1, -2, or -3).

2. The structural strength index is determined by

a) the average tax capacity index (weighting of 50 percent);

b) the relative, average population development (weighting of 25 percent);

c) the geographical-topographical location (weighting of 25 percent).

3. The entitlement is periodically re-assessed.

4. The contribution for project costs or preliminary work pursuant to § 17 paragraph 3 letter a of the FILAG EG is 30,000 francs per merger project.

1. Population numbers are based on the population statistics of the Canton of Solothurn as of December 31 of the base years.

1. For the calculation of state tax revenue, the municipal accounts of the base years are decisive.

1. The base years are three and four years prior to the reference year.

1. All calculations are performed without rounding.

2. The results of the calculations are expressed as follows

a) The fiscal capacity of the canton (SKK) is stated in whole numbers;

b) The fiscal capacity index (SKI), the supplementary benefits rate, the foreign nationals rate, and the youth coefficient are stated to two decimal places after the point.

3. Payments in financial equalization are rounded to one hundred francs according to commercial principles.

1. Amounts under 100 francs are neither paid out nor collected.

1. The determination of a claim for a hardship compensation is based on the relevant global balance sheet for the year 2015.

2. On this basis, an amount in Swiss Francs is calculated for the hardship regulation per municipality for the next four years.

1. A system change is considered to be the transition from the previous financial equalization system to the new financial and burden equalization system based on the relevant overall balance sheet.

1. For the municipalities that are disadvantaged due to the system changeover, the value in Swiss Francs according to § 17 paragraph 2 is calculated as follows: In the first year, the municipality must bear the maximum burden limit set by the Cantonal Council in percentage terms of the state tax revenue (determined burden limit) from the disadvantage; the difference between the disadvantage and the determined burden limit is granted to the municipality as a concession in four annual steps.

2. The concession in Swiss Francs amounts to

a) in the 1st year: 100 percent of the difference between the disadvantage and the determined burden limit;

b) in the 2nd year: 75 percent of the difference between the disadvantage and the determined burden limit;

c) in the 3rd year: 50 percent of the difference between the disadvantage and the determined burden limit;

d) in the 4th year: 25 percent of the difference between the disadvantage and the determined burden limit.

3. From the 5th year onwards, the concession is no longer granted.

1. For municipalities that are advantaged by the system change, the value in Swiss francs pursuant to § 17 paragraph 2 is calculated as follows: In the first year, the municipality will receive the maximum relief limit in percentage of state tax revenue (determined relief limit), as set by the Cantonal Council; the difference between the advantage and the determined relief limit will be deferred and not granted to the municipality as a contribution reserve over four annual steps.

2. The contribution reserve in Swiss francs amounts to

a) in the 1st year: 100 percent of the difference between the advantage and the determined relief limit;

b) in the 2nd year: 75 percent of the difference between the advantage and the determined relief limit;

c) in the 3rd year: 50 percent of the difference between the advantage and the determined relief limit;

d) in the 4th year: 25 percent of the difference between the advantage and the determined relief limit.

3. From the 5th year onwards, the contribution reserve is eliminated.

1. In cases of excessive effects of loading or unloading due to the system changeover, the department may increase levy discounts or reduce contribution reserves.

1. The percentages of betterment and impairment, as determined by the Cantonal Council, in terms of state tax revenue, shall be specified to one decimal place after the comma.

1. A procedure concerning investment contributions under the old law is considered pending if the competent authority has received an application with complete application documents as well as all documents pursuant to § 20 paragraph 3 of the Ordinance on the Law on Direct Financial Equalization (Financial Equalization Ordinance) of April 1, 2003.

2. Applications submitted to the competent authority by December 31, 2015, will be processed under the old law, provided a complete final accounting is available by December 31, 2019.

1. The relevant number of jobs in certain economic sectors of the second and third sectors of a municipality is determined based on full-time equivalents of the following jobs according to the current federal data survey: manufacturing industry/production of goods, mining and quarrying, other industries as well as trade, transportation, and warehousing.

2. The relevant number of public limited companies, limited liability companies, and cooperatives in a municipality is determined according to the current data survey of the canton based on their tax liability due to personal affiliation.

1. The Minimum Deviation from the Median Value (mAM) shall be specified to two decimal places.

2. The Maximum Deviation from the Median Value (maxAM) shall be specified to two decimal places.

1. An excessive relieving or burdening effect exists if, as a result of certain tax matters, there is a deviation of more than 20 percent from the unadjusted average of the base years according to § 39 paragraph 5 letter d of the FILAG EG.

2. Certain tax matters according to paragraph 1 include extraordinary or one-time tax revenues of individual legal entities, or general dissolutions or creations of tax reserves.