How does Switzerland's lump-sum taxation work for wealthy foreign residents?

Checked on 2026-10-26

Switzerland taxes qualifying foreign residents on their annual cost of living instead of worldwide income. You must not hold Swiss citizenship, must not work in Switzerland, and the canton must agree. The federal minimum assessment base is CHF 435,000 in 2026. Some cantons have abolished it.

Key facts

What	The rule	Source
Who qualifies	Foreign nationals, first-time Swiss tax residents or returning after 10+ years away; no Swiss citizenship; no gainful activity in Switzerland	Federal Finance Administration
How it works	Tax on annual cost of living at ordinary rates, instead of on worldwide income	Federal Finance Administration
Federal minimum base (2026)	CHF 435,000	Federal Finance Administration
Control calculation	Tax cannot be lower than tax on Swiss-source income + foreign income for which treaty relief is claimed	Federal Finance Administration
Cantons	About 21 offer it; must agree to the arrangement. Zurich, Schaffhausen, Appenzell Ausserrhoden, Basel-Landschaft, Basel-Stadt abolished it	Federal Finance Administration
Rent floor	Assessment base is at least 7× annual rent (own household) or 3× boarding/pension costs	Federal Finance Administration
Spouses (pending change)	Currently both spouses must qualify. From 2032 at the latest, spouses assessed individually — mixed arrangements possible	Federal Tax Administration

What lump-sum taxation is

Switzerland’s expenditure-based taxation — colloquially called lump-sum taxation or forfait fiscal — is not a fixed fee. It is a method of assessment: instead of declaring your worldwide income and wealth, you are taxed on your annual cost of living in Switzerland and abroad. The ordinary cantonal and federal tax rates apply to that assessment base. The result is a simpler, often much lower tax burden for wealthy foreign residents.

The regime exists as an incentive for wealthy individuals to relocate to Switzerland. It is available only to people who do not work in Switzerland — the moment you take up gainful activity here, the right to lump-sum taxation ends. The same happens if you acquire Swiss citizenship.

Who qualifies

You must be a foreign national taking up Swiss tax domicile for the first time, or returning after at least 10 years’ absence from Switzerland. You must not carry out any gainful activity in Switzerland. The right lapses the day you acquire Swiss nationality or start working.

The canton where you intend to live must agree to the arrangement. Each canton runs its own procedure and may set a higher minimum assessment base than the federal floor. Research the canton’s practice before moving — some cantons are known to be more welcoming and have lower practical minimums than others.

The minimum tax base: CHF 435,000 in 2026

The federal Direct Tax Act sets a minimum assessment base, adjusted for inflation each year. For 2026 it is CHF 435,000. In addition, the tax may not fall below what would be due on your Swiss-source gross income (salaries, pensions, property income) plus foreign income for which you claim treaty relief. This is called the control calculation: if 7× your annual rent is higher than the minimum base, the rent figure takes over. If you live in a boarding house or hotel, the floor is 3× the annual boarding or pension cost.

Which cantons offer it

Several cantons have abolished lump-sum taxation through popular votes: Zurich (2009, abolished from 2010), Schaffhausen, Appenzell Ausserrhoden, Basel-Landschaft and Basel-Stadt. Thurgau, St. Gallen, Lucerne and Bern retained it but with stricter rules. About 21 cantons still offer it as of 2026. The practical minimum total tax outlay varies and is typically in the range of CHF 200,000 or more per year, depending on the canton and your personal situation.

Change coming: individual taxation

On 8 March 2026 Swiss voters approved the Federal Act on Individual Taxation (54.23% in favour). Currently, both spouses must qualify for lump-sum taxation — an “all or nothing” rule. Following the reform, each spouse will be assessed individually. This means one spouse could be under lump-sum taxation and the other under ordinary taxation. The change must be implemented by the cantons by 2032 at the latest.

Lump-sum taxation covers direct federal tax and cantonal/communal taxes. It is usually negotiated and fixed for a multi-year period through an agreement with the canton.
Moving to Switzerland involves both a residence permit and a tax arrangement — they are separate processes, though the permit decision may consider your tax contribution.

Sources

Federal Finance Administration: Lump-sum taxation checked 2026-10-26
Federal Tax Administration: Taxation of married couples and families — individual taxation referendum checked 2026-10-26

Change history

2026-10-26: Page created

This is general information, not legal advice, and Lumen is not a law firm. Rules change and offices differ: check the official sources above before you act. Found something wrong or out of date? Write to support@lumen.observer.