What is Swiss lump sum taxation (Pauschalbesteuerung) for wealthy foreigners?

Lump sum taxation (Pauschalbesteuerung) is a special regime for wealthy foreign nationals who move to Switzerland but do not work there. Instead of taxing actual income and wealth, Switzerland taxes an amount based on the taxpayer's annual living expenses — typically at least five times the annual rent or rental value of their Swiss property.

The minimum taxable base is CHF 400,000 per year at the federal level; cantons set their own minimums, some higher. This makes it attractive for billionaires who have modest Swiss living costs relative to their global wealth. Notable users have included celebrities and business figures based in Ticino, Geneva, and Valais.

Eligibility requires that you are a non-Swiss national, have not worked in Switzerland in the past ten years, and are taking up residence in Switzerland for the first time. If you take up employment in Switzerland, you lose eligibility. Not all cantons offer the regime — Zurich, Schaffhausen, and Appenzell Ausserrhoden abolished it; most French and Italian-speaking cantons still allow it.

This is general information only, not professional tax advice. Consult a qualified tax professional for your specific situation.