In Switzerland, foreign wealthy families often benefit from a special tax option: lump-sum taxation (forfait fiscal). Instead of paying tax on the worldwide income and assets, the tax is calculated based on the living expenses. The Swiss lump sum tax regime can be applied to individuals who:
- Do not have Swiss citizenship;
- Take up residency in Switzerland for the first time (or after an absence of 10 years); and
- Do not perform any commercial activity in Switzerland.
The total living expenses must correspond to at least seven times the annual rental value of the taxpayer’s home or the annual rent paid and be at least equivalent to the taxes on the income from Swiss sources at the ordinary tax rate.
