Switzerland has recorded a record influx of wealthy foreigners choosing a lump-sum tax system. According to the latest data, Russians make up the largest group of new recipients of the lump-sum taxation status, a regime that allows paying taxes based on living expenses rather than global income. Every 5 residents who pay taxes under this scheme are citizens of the Russian Federation. The Chinese, British and Americans are also among the leaders.
Capital migration trends
Statistics from the Conference of Cantonal Financial Directors show a steady increase in tax revenues from lump-sum residents. Over the past years, 4,557 people have benefited from preferential treatment, bringing 821 million Swiss francs to the treasury. The average amount of tax paid was 180,162 francs per person.
The dynamics across the cantons is as follows:
- Vaud: 1,054 lump-sum taxable residents
- Valais: 946 people
- Ticino: 896 residents
- Geneva: 523 taxpayers
In the canton of Ticino, there is a particularly significant trend. The increase in tax revenues from 118 to 157.8 million francs.
Entry conditions and barriers
Lump-sum taxation is available only to foreign citizens who are receiving tax residence in Switzerland for the first time or returning after a 10-year absence. The key condition is the absence of work activity on the territory of the confederation.
The minimum tax burden varies by canton:
- Third-country nationals: 250,000 to 300,000 francs annually.
- EU/EFTA citizens: minimum preferential rates.
- Additionally: social contributions of about 25,000 francs per person.
The base is calculated based on the world standard of living expenses, including the maintenance of real estate, staff, transport and education of children. A formula of seven times the annual rent for basic housing is usually applied.
Expert assessment of trends
Migration law analysts have noted increased competition between Swiss cantons to attract wealthy residents. The COVID-19 pandemic and geopolitical instability have stimulated interest in jurisdictions with developed financial infrastructure and political stability.
The lump-sum taxation system is criticized internally for violating the principle of equality, but is supported as a tool for attracting capital. Referendums on the abolition of preferential treatment were held in Zurich, Schaffhausen, Appenzell-Ausserrhoden and Basel.
- We will answer all your questions
- We will help you choose the best option
- We will guide you through every step or do everything for you
Our company provides professional advice on obtaining visas, residence permits and tax residency. Our specialists will help you assess the prospects for relocation and prepare the necessary documents. Leave a request for an individual consultation for a detailed analysis of your situation.
Implemented a system for tracking the stages of visa processing for clients, which increased their satisfaction by 30% (according to survey results).
Login with Google