Lawyers warn of major changes to generous Swiss tax
Sunday, February 20th, 2011Press release:
Specialist wealth preservation legal practice Lane-Smith & Shindler is urging those considering a move to Switzerland for tax reasons to make arrangements with Swiss authorities promptly as major changes loom.
The practice, which has an associated office in Zurich, understands that the proposed new changes to the Swiss Lump Sum tax will end up costing new residents in some Cantons between 50-100% more. Returning Swiss nationals, who had qualified after ten years outside Switzerland, will not be able to do so under the new arrangements.
The changes include a higher rate of calculation for the tax and doubling the minimum income to qualify to CHF 400,000. Additionally the proposals call for Cantons to be obliged to levy income and wealth taxes to a minimum level.
The Swiss Lump Sum tax, known as (Pauschalreglung in German and Imposition Forfaitaire in French) allows those seeking Swiss residence for the first time to pay a relatively generous single lump sum instead of taxing worldwide assets and income.
The arrangement is only open to those who agree not take any gainful employment or maintain businesses under which they receive income in Switzerland.
Tim Urquhart of the Swiss office associated with Lane-Smith & Shindler said: “The changes are at proposal stage. No one can say with absolute accuracy when the changes will be introduced, but it could be as early as summer 2011. It might seem a long-time away but in order to take advantage of the 5 year period of transition allowed between the old and the proposed new provisions but it is imperative to start negotiations with the authorities sooner rather than later.”
At the end of the transition period of 5 years, all existing lump-sum arrangements (under the more generous structure) will be brought up to the new standards.
Paul Davies a partner at Lane-Smith and Shindler adds: “Switzerland is an attractive tax option for wealthy individuals and will remain so despite the changes. Even though those wishing to take advantage of this generous tax scheme should do so quickly, what is even more important is to select the right Canton to reside in and pay tax.”
“The differences in tax regimes between the 26 Cantons can be surprisingly marked to say the least, with some not levying wealth or capital gains taxes.”


