Lump-Sum Taxation (Forfait Fiscal) – Switzerland

Foreign nationals (non-Swiss citizens) only. Both spouses must be non-Swiss. If Swiss citizenship acquired, regime ends and ordinary taxation applies. Swiss citizens returning after 10+ years abroad: not eligible (changed from past rules).

Must be moving to Switzerland for first time, OR returning after minimum 10 years spent abroad. Cannot have been Swiss tax resident in preceding decade. Rule prevents residents from switching to lump-sum mid-residence.

Cannot engage in any gainful employment or business activity in Switzerland. Passive wealth management permitted (managing own investments). Can work abroad. Cannot hold executive positions in Swiss companies. Any Swiss-source earned income disqualifies the regime entirely.

Tax base = higher of: (1) Seven times annual rental expense/rental value of Swiss residence, OR (2) Actual worldwide living expenses. Rental value used if property owned. Hotel residents: three times boarding costs. Negotiated with cantonal tax authorities.

Federal minimum taxable base CHF 434,700 (2026). Tax cannot be lower than this amount for federal purposes regardless of expenses/rent. EU/EFTA citizens: reduced minimum CHF 400,000. Creates effective 'floor' on tax liability.

Each canton sets own minimum expense threshold (typically CHF 400,000-600,000+). Geneva, Vaud, Valais, Bern maintain regime with varying minimums. Negotiation possible within canton guidelines. Some cantons require proof of financial resources separate from tax base.

Once base determined, ordinary cantonal/municipal/federal rates apply. Low-tax cantons: ~18-25% (Zug, Schwyz, Vaud communes). High-tax cantons: ~35-45% (Geneva, Bern). Example: CHF 1M base in Zug = ~CHF 180,000-250,000 total tax. Much lower than ordinary taxation on same worldwide income.

Lump-sum covers both income tax and wealth tax. No need to report actual worldwide income or assets. Provides confidentiality and simplicity. Swiss-source income (if any) still separately taxed at ordinary rates. Excludes VAT, inheritance tax, real estate taxes.

Zurich, Basel-Stadt, Basel-Landschaft, Schaffhausen, Appenzell Ausserrhoden abolished cantonal lump-sum through popular votes. Federal lump-sum still technically available but useless (would pay full cantonal/municipal tax + federal lump-sum). Not recommended to relocate to these cantons for lump-sum.

Lump-sum taxpayers receive standard B residence permit (renewable annually). Not special permit - same as work/family permits but issued based on lump-sum tax agreement. Must establish primary residence in Switzerland and spend substantial time (~183+ days recommended).

After 5 years (USA/Canada citizens) or 10 years (other nationalities): eligible for C permit (permanent residence) subject to integration criteria. Can maintain lump-sum regime with C permit. Path to citizenship after 10+ years total residence (but ends lump-sum).

Apply directly to chosen canton's tax administration. Negotiate tax base and annual amount. Submit proof of financial resources, clean criminal record, health insurance. Process: 3-6 months typically. Recommendation: work with specialized Swiss tax advisors/lawyers.