Swiss Tax Package
The lump sum tax (Swiss tax package), also known as the lump sum tax or tax on expenditure, is a special tax regime in Switzerland that allows wealthy foreigners to benefit from reduced taxation on their income and wealth, in exchange for a fixed fee based on their level of spending in Switzerland.
The lump sum tax regime in Switzerland was introduced to attract wealthy foreign investors to the country and stimulate the local economy. Persons eligible for the lump sum tax regime are foreigners who do not work in Switzerland and who do not exercise a gainful activity in the country, but who have high incomes and a large fortune. They must also reside in Switzerland permanently.
The amount of the tax lump sum (Swiss tax package) is determined according to the person’s standard of living and is calculated on the basis of the annual expenses incurred in Switzerland. Expenses taken into account include accommodation costs, food and beverage costs, transport costs, leisure costs and health costs.
The lump sum tax regime in Switzerland has been criticized for its lack of transparency and tax fairness, as it allows wealthy individuals to benefit from more advantageous taxation than average Swiss citizens. However, some defenders of the regime argue that it is necessary to maintain Switzerland’s tax competitiveness and attract foreign investors.
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