Financial Equalization Ordinance (FAV) (FAV)

1 The Statistical Office determines the population based on the reference date and

1 The municipalities are responsible for the completeness, accuracy, delivery,

and timeliness of data delivery to the Statistical Office. of data

2 If delivery does not occur or is incomplete, the Statistical Office may

request supplements. If these are not provided, it may employ statistical

procedures to calculate the resident population.

B. Tax rates

For the calculation of the weighted tax rate pursuant to § 8 Weighted

lit. c sentence 2 FAG, the tax rates of the individual groups of taxpayers

are multiplied by the absolute tax capacity of the respective group;

the sum of these products is divided by the sum of the absolute tax

capacity of the groups. Formula 7 in the Annex to this Ordinance is

decisive.

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1

132.11

Financial Equalization Ordinance (FAV)

Cantonal Average

of Total Tax

Rates

The calculation of the cantonal average of the total tax rates

according to § 8 lit. d FAG is carried out analogously to § 3. Formula 8

in the annex to this ordinance is decisive.

C. Tax Revenue and Tax Capacity

Revenue from

general

municipal

taxes

1 The revenue from general municipal taxes according to § 8 lit. f FAG comprises, with reference to an assessment year according to § 12 para. 3 and

For the calculation of a municipality's absolute fiscal capacity

pursuant to Section 8 lit. f FAG, the tax revenue according to Section 5, taking into account

the tax rates applied for the individual tax years,

is converted to 100%.

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Fiscal Equalization Ordinance (FAV)

132.11

The adjusted absolute fiscal capacity is the absolute fiscal capacity according to § 6, increased by the resource contribution converted to a tax rate of 100% or reduced by the resource Abschöpfung. Formulas 9a and b in the annex to this ordinance are decisive.

lit. e of the Financial Equalization Act of July 12, 2010 (FAG)³ establishes. Composition

The primary residence is decisive.

2 The recording of the resident population takes place annually. The reference date is December 31.

3 Persons who are registered in the municipality on the reference date or are moving away are recorded if they are

a. Swiss nationals,

b. foreign nationals with a settlement or residence permit,

c. foreign nationals who do not fall under lit. b and have been registered in the municipality for at least twelve months.

4 Asylum seekers are not recorded.

For the calculation of the cantonal average of relative fiscal capacity in accordance with § 8 lit. h FAG, the absolute fiscal capacity of all municipalities in accordance with § 6 is divided by the resident population of the canton in accordance with § 1. The values for the City of Zurich are not taken into account. Formula 11 in the Annex to this Ordinance is decisive.

D. Reporting of Data

The political communes shall transmit to the Statistical Office, in accordance with its specifications

a. by January 31, an extract from the inhabitants' register with the data according to § 1 for the preceding year,

b. by January 31, the tax rates for the current year,

c. by January 31, all changes to the communal organization of the preceding year that may affect the data to be supplied by the Statistical Office,

d. by March 31, all information required for the calculation of the absolute tax capacity for the preceding year according to § 5.

The Education Statistics Department of the Directorate of Education reports to the Statistical Office by March 31 the number of pupils and students for the preceding year in accordance with § 21.

Political municipalities report to the Office for Spatial Development of the Canton of Zurich (ARE) by January 31st all changes from the preceding year that affect the size of their territory.

1 The FSO determines the area of the municipalities (municipal territory) and the inclination area of the municipalities in accordance with §§ 24 and 25. 2 The FSO reports the corresponding values to the Statistical Office by March 31.

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3

Bestand

132.11

E. Equalization Factors

Financial Equalization Ordinance (FAV)

1 The Statistical Office shall collect or calculate, by June 15 of

the year preceding the equalization year (previous year), for the attention of

the Municipal Office, the following factors relevant for financial equalization

(equalization factors)

a. the number of inhabitants of the political municipalities and the

Canton in accordance with § 1,

b. the number of inhabitants under 20 years of age of the

political municipalities and the Canton in accordance with § 20,

c. the tax rates of the political municipalities and school districts

in accordance with § 8 lit. c sentence 1 FAG,

d. the weighted tax rate of the school districts in accordance with § 8 lit. c

sentence 2 FAG and § 3,

e. the total tax rates of the municipalities in accordance with § 8 lit. c FAG,

f. the cantonal average of the total tax rates in accordance with § 4 in the

assessment year and in the second year preceding the entry into force

of the Financial Equalization Act,

g. the equalization tax rate in accordance with § 24 para. 2 FAG,

h. the absolute fiscal capacity of the municipalities in accordance with § 6,

i. the absolute fiscal capacity of the school districts within the territory of the

political municipalities,

j. the relative fiscal capacity of the municipalities in accordance with § 8,

k. the cantonal average of the relative fiscal capacity in accordance with § 9,

l. the population density in accordance with § 24,

m. the progression index in accordance with § 25,

n. the level of the national consumer price index in accordance with § 7

para. 2 FAG with the index level at the end of the second calendar

year preceding the equalization year, and the base index,

o. the number of pupils in accordance with § 21,

p. the adjusted absolute fiscal capacity of the municipalities and the school

districts within the territory of the political municipalities in accordance with § 7,

q. the average net expenditures per inhabitant in accordance with § 28 para. 1.

2 For inflation compensation, the national consumer price index based

on the year 2005, end of December, shall be decisive.

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Financial Equalization Ordinance (FAV)

132.11

Roundings

Art. 3 FAG the proceeds of the following taxes

a. Income and wealth taxes of natural persons

in accordance with § 187 para. 1 lit. a of the Tax Act of June 8, 1997 (StG)6,

b. Profit and capital taxes of legal entities in accordance with

The municipal office makes final decisions within the expenditure competence of the Government Council regarding contributions from the

a. resource equalization,

b. demographic special burden equalization,

c. geographical-topographical special burden equalization,

d. individual special burden equalization,

e. center burden equalization,

f. transitional equalization.

### 1 The Municipal Office Opens the Assessment of Equalization Factors

1 The Municipal Office shall notify the political municipalities and the school municipalities, by the end of June of the preceding year, via an appealable decision, of the equalization factors in accordance with § 14 para. 1 lit. a–n.

2 The Municipal Office shall inform the political municipalities and the school municipalities by the end of June of the number of students in accordance with § 14 para. 1 lit. o.

The Statistical Office shall, after expiry of the legal publication period,

promptly publish the equalisation factors in accordance with § 16 para. 1 electronically

on its website. It shall indicate which of the equalisation factors

are disputed.

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132.11

Financial Equalisation Ordinance (FAV)

Determination of contributions

1 Based on the equalization factors, the municipal office shall, by the end of August of the preceding year, determine the equalization contributions for the following instruments for the political municipalities and school municipalities

a. Resource grant,

b. Resource levy,

c. Demographic special burden equalization,

d. Geographical-topographical special burden equalization,

e. Central burden equalization.

2 If an equalization factor is challenged, the contributions shall be provisionally determined.

3 The demographic special burden equalization shall only be determined for the political municipalities.

4 Political municipalities and school municipalities shall determine the exact number of pupils based on the information pursuant to § 16 para. 2 and calculate the contribution to a school municipality pursuant to § 19 para. 4 FAG.

Payments

Residents under 20 years

Pupils

Section 2: Instruments of Financial Equalization

A. Resource Equalization

1 Upon receipt of the grant, the political municipality shall disburse the contribution to the school municipalities without undue delay.

2 The school municipalities shall timely pay their contribution to the clawback to the political municipality in accordance with the decision, so that the political municipality can observe the deadline pursuant to § 16 FAG.

B. Demographic Special Burden Equalization

Residents under 20 years of age are persons according to § 1 who, on December 31 of the assessment year according to § 19 para. 5 FAG, have not yet completed their 20th year of age.

1 Determining the Number of Pupils in a School District

The school year beginning in the assessment year is decisive for the number of pupils in a school district according to § 19 para. 4 FAG.

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Ordinance on Financial Equalization (FAV)

132.11

2 If a school district comprises several political municipalities, the number of pupils is determined by their place of residence in the individual political municipalities.

3 For the share of school districts in Formula 5c in Annex 1 to the Financial Equalization Act, only pupils with a place of residence in the political municipality are to be considered. Entitled are the school districts in the territory of the political municipality.

The following tasks of the functional breakdown are included in the tasks for the compensation of the demographic special burden equalization

a. Education, excluding miscellaneous education,

b. School health service,

c.12 Youth, day-care centers.

Upon receipt of the contribution, the political municipality shall immediately disburse the contribution to the school municipalities.

C. Geographic-Topographic Special Burden Equalization

11 1. Population Density

Population density according to § 21 para. 1 lit. a FAG is defined as the number of inhabitants per square kilometer of productive area of the political municipality, according to the information on land cover from the official survey at the end of the assessment year.

2. The productive area corresponds to the area of the political municipality in square kilometers (municipal area) minus the area for waters and the vegetation-free areas without extraction and landfill according to the Technical Ordinance of the VBS of June 10, 1994, on the official survey8.

3. Formula 12 in the Annex to this Ordinance is decisive.

1 As a gradient index according to § 21 para. 1 lit. b FAG, the gradient index is

the quotient between the proportion of the municipal territory with a slope

inclination over 35% (inclination area) and the entire municipal

territory excluding lake areas.

2 The inclination area is calculated according to the "DHM25" elevation model

of the Federal Office of Topography swisstopo using the

smoothed 25-meter grid.

3 Formula 13 in the annex to this Ordinance is authoritative.

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Tasks

132.11

Financial Equalisation Ordinance (FAV)

The following tasks of the functional breakdown are included in the compensation for the geographically-topographical special burden equalization

a. Fire brigade and fire police,

b. Municipal roads,

c. Watercourse maintenance and regulation,

d. Forestry.

Entitlement

Special

Burdens

D. Individual Special Burden Equalization

1. Political communes that claim contributions from the individual equalization of special burdens must, for the equalization year, levy an overall tax rate that is at least equivalent to the equalization tax rate according to § 24 para. 2 of the FAG.

2. Political communes that claim contributions for covering special burdens for extraordinary events must, at least for the year following the equalization year (subsequent year), levy an overall tax rate that is at least equivalent to the equalization tax rate according to

1 Uncontrollable net expenditures of a municipality for necessary tasks in a tax-financed area of the functional classification shall not be considered a special burden in accordance with § 23 FAG, to the extent that the per capita expenditures are greater than the average net expenditures of all municipalities without the cities of Zurich and Winterthur.

2 In particular, the following net expenditures are considered controllable and shall not be taken into account

a. additional depreciations on administrative assets,

b. contributions to pre-financings,

c. expenditures and reduced revenues that violate the principles according to

In global budgeting, the information from the internal global accounting system, upon which global budgeting and accounting are based, is decisive.

1 **The political municipality records and assesses in its task and financial planning the development of possible special burdens according to § 28 that qualify for compensation. The same applies to school municipalities.**

**a. Preliminary**

**Determination of the Contribution**

2 **Political municipalities that apply for contributions from the individual special burden equalization submit the application to the Municipal Office by the end of August of the preceding year. They attach the draft budgets and previous year's accounts of the political municipality and school municipalities with all other documents required for review.**

3 **In the information according to § 26 para. 1 FAG, the municipality justifies the special burdens in detail. In doing so, it particularly provides proof of the legal basis and the lack of possibility to influence or reduce the amount of net expenses.**

4 **The preliminary determination of the contribution takes place by the end of October of the preceding year. If the information from the municipalities is incomplete or disputed, the Municipal Office may provisionally decide on the basis of the available information.**

5 **For the determination of the preliminary contribution, the Municipal Office obtains the opinions of the specialized directorates and the expert advisory board.**

1 The political municipality shall submit to the municipal office for the

equalization year the budget and annual financial statements, as well as those of the school

municipalities, along with all other required documents, by the end

of March of the following year.

2 The political municipality shall forward to the municipal office the comprehensive

audit reports and proposals of the control bodies concerning the financial-

technical and financial-policy audit of the annual financial statements by no

later than May 15 of the following year.

3 The final determination of the contribution shall take place by no later than the end

of October of the following year.

b. Extraordinary

events,

final

determination of the

contribution

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132.11

Financial Equalization Ordinance (FAV)

Payment of the

provisional

contribution

Expert Advisory Board

a. Tasks and

procedure

b. Appointment

c. Remuneration

d. Secretariat

Payment of the provisional contribution under § 26 para. 2 FAG shall be made in the middle of the equalization year.

1 The expert advisory board advises the directorate and the municipal office.

2 The municipal office shall submit to the board, by July 31st of the following year, written proposals for the final subsidy decisions together with the corresponding files for comment.

3 In the case of § 27 Abs. 4 FAG, the municipal office shall first obtain the necessary opinions from the expert directorates and take them into account in its proposal to the expert advisory board.

4 The expert advisory board shall submit its written statement by the end of September of the following year at the latest. It may submit a reasoned counter-proposal.

5 The municipal office is not bound by the counter-proposal. Insofar as it deviates from it, it shall inform the affected municipality of the reasoned counter-proposal together with the subsidy decision. It shall provide a detailed justification for its divergent position.

**1 Representatives of the Canton and the Municipalities**

pursuant to § 27 para. 2 FAG shall be elected for a term of office of

four years.

**2 After the election of the chairperson by the representatives**

of the Canton and the municipalities, the expert advisory board

shall constitute itself. The chairperson shall be elected for a term of

four years.

**3 The chairperson shall convene the expert advisory board as**

needed or at the request of two members of the expert advisory board.

**4 The expert advisory board shall issue rules of procedure.**

1 The Directorate of Justice and Home Affairs (Directorate) determines

the remuneration of the chairperson for a period of four years in each instance.

The decisive factors are the rates paid to the members of the accompanying committee

of the Financial Control pursuant to § 4 para. 4 of the Financial Control Act

of 30 October 20005.

2 The municipalities receive remuneration for their representation

in accordance with § 55 para. 2 of the Enforcement Ordinance to the Personnel Act

of 19 May 19994.

1 The Municipal Office, in consultation with the Chair, manages the secretariat of the Expert Advisory Board. The Municipal Office is represented in the negotiations of the Expert Advisory Board by the person leading the secretariat, with an advisory vote.

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Financial Equalization Ordinance (FAV)

132.11

2 The Municipal Office records minutes of the meetings of the Expert Advisory Board.

3rd Section: Effectiveness Report

1 The Directorate shall prepare the effectiveness report for the attention of the Government Council, with the effective participation of the other Directorates, in accordance with the report

1. Political municipalities applying for equalization contributions from the transitional procedure must submit their application to the Municipal Office by the end of September of the preceding year. They must include the budget drafts and previous year's accounts of the political municipality and school municipalities, along with all other documents required for review.

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132.11

Financial Equalization Ordinance (FAV)

a. Provisional determination of the contribution

b. Final determination of the contribution

2. The provisional determination of the contribution is made by the end of November of the preceding year. If the information provided by the municipalities is incomplete or disputed, the Municipal Office may provisionally determine the contribution based on the available information.

3. When reviewing expenditures for which state contributions are paid, the Directorate will be supported by the Directorate responsible for those expenditures.

1 For the final determination of the contribution, the political

municipality shall submit the annual accounts for the equalisation year from the political

municipality and school municipalities, along with all other documents required for examination,

to the Directorate by no later than the end of March of the following year.

2 The finally determined contribution may not exceed the provisionally determined

contribution.

3 The further procedure shall be governed by § 32 paras. 2 and 3.

Provisional

Payment of Contribution

Repayment

by the Municipality

The payment of provisional contributions takes place in the middle of the equalization year.

In the event of a reduction in the contribution, the repayment to the municipality will be made 30 days after the corresponding order becomes legally binding.

13

Calculation

and Reporting

of Data

B. Other Provisions

1. The Statistical Office calculates the values in accordance with Article 34 paragraphs 2 and 3 of the FAG.

2. For the calculation and communication of the decisive total tax rate in accordance with Article 36 paragraphs 2 and 3 of the FAG, the deadlines in accordance with

In the year preceding the year of the entry into force of the Financial Equalization Act, the deadlines according to § 14 para. 1, § 16 para. 1 and § 18 para. 1 shall not apply. The Municipal Office shall make the necessary notifications as soon as the equalization factors are known or have become legally binding.

**1** The Directorate shall prepare an interim report on the first two years of the implementation of the Fiscal Equalisation Act.

**2** The report shall contain information on the amount of equalisation contributions, the development of municipal tax rates, and the tax capacity over the last four years.

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**Fiscal Equalisation Ordinance (FAV)**

**132.11**

**3** In particular, the report shall contain information on groups of municipalities with the following population sizes

a. fewer than 2000 inhabitants,

b. 2000 to 4999 inhabitants,

c. 5000 to 9999 inhabitants,

d. 10000 to 19999 inhabitants.

1 OS 66, 769; reasoning see ABI 2011, 2425.

2 Entry into force: 1 January 2012.

3 LS 132.1.

4 LS 177.111.

5 LS 614.

6 LS 631.1.

7 LS 722.1.

8 SR 211.432.21.

9 Inserted by RRB of 12 April 2017 (OS 72, 388; ABI 2017-05-05). In force since 1 August 2017.

10 Version according to RRB of 12 April 2017 (OS 72, 388; ABI 2017-05-05). In force since 1 August 2017.

11 Version according to RRB of 29 August 2018 (OS 73, 395; ABI 2018-09-07). In force since 1 January 2019.

12 Version according to RRB of 6 October 2021 (OS 76, 653; ABI 2021-10-29). In force since 1 January 2022.

13 Repealed by RRB of 9 March 2022 (OS 77, 237; ABI 2022-03-25). In force since 1 June 2022.

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**132.11**

**Fiscal Equalisation Ordinance (FAV)**

**Annex (to the Fiscal Equalisation Ordinance)**

**Formula 7**

**Weighted tax rate (§ 8 lit. c sentence 2 FAG, § 3 FAV)**

U

U

Σ

u=l

u=l

gSFu;t-2 = (SKAu,t-2 × SFut-2) / SKAust-2

**Legend**

gSFu;t-2 Weighted average of the tax rates of the groups of taxpayers u in the assessment year t-2

SFu;t-2 Tax rates of the groups of taxpayers in the assessment year t-2

SKAu;t-2 Absolute tax capacity of the groups of taxpayers in the territory of a political municipality in the assessment year t-2

U Number of groups of taxpayers

Σ Summation sign

**Formula 8**

**Cantonal average of total tax rates (§ 8 lit. d FAG, § 4 FAV)**

N

N

GSFKM1-2 = (SKAit-2 × GSFit-2)/SKAu,t-2

**Legend**

GSFi:t-2 Total tax rate of municipality i in the assessment year t-2

GSFKM;t-2 Cantonal average of total tax rates in the assessment year t-2

N All political municipalities excluding the city of Zurich

SKAi;t-2 Absolute tax capacity of municipality i in the assessment year t-2

Σ Summation sign

14

**Fiscal Equalisation Ordinance (FAV)**

**Formula 9a and b**

**Adjusted absolute tax capacity (§ 7 FAV)**

a) bSKAi;t-2 = SKAi;t−2 + Zi;t/GSFi;t-2

b) bSKAi;t-2 = SKAi;t–2 – Ai;t

**Legend**

Ai;t Resource clawback from a political municipality i in the equalisation year t (Formula 3)

bSKAi;t-2 Adjusted absolute tax capacity of political municipality i in calendar year t-2

GSFi;t-2 Total tax rate of political municipality i in the assessment year t-2

SKAi;t-2 Absolute tax capacity of political municipality i in calendar year t-2

Zi;t Resource grant to a political municipality i in the equalisation year t (Formula 1)

**Formula 10**

**Relative tax capacity (§ 8 lit. g FAG, § 8 FAV)**

SKRi;t-2 = SKAi;t-2/Ei;t-2

**Legend**

Ei;t-2 Number of inhabitants of political municipality i in the assessment year t-2 (§ 1)

SKAi;t-2 Absolute tax capacity of political municipality i in the assessment year t-2 (§ 6)

SKRi;t-2 Relative tax capacity of political municipality i in the assessment year t-2

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**132.11**

**132.11**

**Fiscal Equalisation Ordinance (FAV)**

**Formula 11**

**Cantonal average of relative tax capacity (§ 8 lit. h FAG, § 9 FAV)**

N

SKRKM;t-2 = ∑ SKAi;t-2 / EK-SZH;t-2

**Legend**

EK-SZH;t-2 Number of inhabitants of the Canton excluding those of the city of Zurich in the assessment year t-2 (§ 1)

SKAi;t-2 Absolute tax capacity of political municipality i in the assessment year t-2 (§ 6)

SKRKM;t-2 Cantonal average of relative tax capacity in the assessment year t-2

N All political municipalities excluding the city of Zurich

Σ Summation sign

**Formula 12**

**Population density (§ 24 FAV)**

Di;t-2 = Ei;t-2/APi;t-2

**Legend**

APi:t-2 Productive area of political municipality i in square kilometres at the end of the assessment year t-2 (§ 24 para. 2)

Di;t-2 Population density of political municipality i in inhabitants per km² (square kilometre) of the productive area of political municipality i in the assessment year t-2

Ei;t-2 Number of inhabitants of political municipality i in the assessment year t-2 (§ 1)

16

**Fiscal Equalisation Ordinance (FAV)**

**Formula 13**

**Slope index (§ 25 FAV)**

Si;t-2 = (Ni,35+,i,t-2 / ARi;t-2)

**Legend**

ARi;t-2 Municipal territory of political municipality i excluding lake areas in a 25-meter grid at the end of the assessment year t-2

Ni,35+;t-2 Slope area of political municipality i in a 25-meter grid with a slope gradient exceeding 35% according to the "DHM25" elevation model of the Federal Office of Topography swisstopo, with smoothing of the 25-meter grid by assigning the average elevation value of all grid cells within a 50-meter radius to each cell at the end of the assessment year t-2

Si;t-2 Slope index: Proportion of the territory of political municipality i with a slope gradient exceeding 35% in the assessment year t-2

**132.11**

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17

**Absolute Tax Capacity**

Para. 1 lit. b Tax Law,

c. Withholding taxes pursuant to § 187 para. 1 lit. c and para. 2 Tax Law.

2 The tax revenue pursuant to para. 1 lit. a and b is composed, in relation to

the assessment year, of

a. the annual statement,

b. the debit adjustment and arrears statements.

3 The revenue from withholding taxes pursuant to para. 1 lit. c is calculated

according to the credits made to the municipalities in the assessment year.

4 The calculation of tax revenue particularly includes

a. tax apportionments pursuant to §§ 191, 192 and 198 Tax Law,

b. supplementary taxes pursuant to § 8 lit. f FAG in conjunction with §§ 160

and 162 para. 2 Tax Law.

5 The following shall be deducted from the tax revenue pursuant to para. 1–4

a. tax remissions pursuant to § 197 Tax Law,

b. write-offs of tax claims,

c. flat-rate tax credits.

6 The personal tax pursuant to § 199 Tax Law is not part of the tax

revenue.