In our Global Opportunities for Relocation 2018 report, BDO provides an overview of tax regimes around the world. Click through to our global map to see four broad types of tax regime.
Lump sum – Switzerland offers a special tax regime for individuals moving to Switzerland. The so-called "lump-sum taxation" is a tax based on the annual living expenses of a taxpayer and allows to reduce the overall tax burden to a very low level
Significant wealth, a strong economy, political stability and beautiful landscapes attract many individuals to live and work in Switzerland. Whilst at a federal level, there are no net wealth, real estate, inheritance or gift taxes, and the total tax burden on income is limited to 11.5%, it is the Swiss cantons which have fiscal sovereignty and taxation rights.
Each canton is free to set its own rates and generally impose income, net wealth, real estate, inheritance, gift and capital gains taxes on certain transactions. Capital gains from the disposal of private assets, except real estates, are generally tax free. An individual will be assessable to tax in the canton in which their personal and business interests lie, with intercantonal double tax relief applying to ensure an individual is only assessed to the same income once.
Depending on the canton, the combined income tax rate (federal and cantonal) could be as low as 22%. Income tax on dividends from substantial participations (> 10%) can be reduced by up to 50%. The transfer of assets to own children, grandchildren and spouses is exempt from gift and inheritance tax in most of the cantons.
Expenditure-based (lump sum) taxation is available to Swiss-resident foreign individuals without gainful employment in Switzerland. This form of taxation expires when a person acquires Swiss citizenship. The tax is imposed on the total annual cost of living, with the taxable base being negotiated with the tax authorities. Whilst some Cantons, such as Geneva, recognize lump sum taxation, it is not available in all Cantons, including Zurich. In addition, minimum taxable bases apply at both federal and Canton level.
EU/EFTA citizens with a local permanent employment contract do not need to apply for a visa. To receive a work/residence permit, one need to register with the Swiss immigration authorities upon arrival.
Non-EU/EFTA citizens require a work authorization and a visa. These must be obtained prior to enter Switzerland.