Lump-sum taxation in Switzerland (taxation based on expenditure)

Short answer

Foreign nationals who take up residence in Switzerland for the first time, or after at least ten years abroad, and do not work here can be taxed on their expenditure. The basis is then worldwide living costs instead of income and wealth, with statutory minimums and a control calculation. Several cantons, including Zurich and Basel-Stadt, have abolished lump-sum taxation.

Conditions

• No Swiss citizenship.
• First-time residence in Switzerland, or return after at least ten years abroad.
• No gainful activity in Switzerland.
• Residence in a canton that offers taxation based on expenditure.
• For married couples living together, both spouses must meet the conditions.

Assessment

The tax base is the annual living costs incurred in Switzerland and abroad by the taxpayer and the persons they support. For the direct federal tax, the base is at least the highest of these amounts: a minimum adjusted for inflation (tax year 2026: CHF 435,000), seven times the annual rent or rental value for taxpayers with their own household, otherwise three times the annual price of board and lodging (Art. 14 of the Federal Act on Direct Federal Taxation, DBG). The cantons set their own minimums and decide how wealth tax is covered.

A control calculation ensures that the tax is at least as high as the ordinary tax on certain income: income from real estate and movable property located in Switzerland, from capital invested in Switzerland, from copyrights and patents exploited in Switzerland, pensions from Swiss sources and foreign income for which relief under a double taxation treaty is claimed.

Cantons and framework

The cantons of Zurich, Schaffhausen, Appenzell Ausserrhoden, Basel-Stadt and Basel-Landschaft have abolished lump-sum taxation; it continues in other cantons, some with their own minimums. A popular initiative to abolish it across Switzerland was rejected in November 2014; since 1 January 2016, the stricter rules of the Federal Act of 28 September 2012 apply, with higher minimum assessments. The rules change with legislative revisions – the current legal position must be clarified case by case with tax advisers and the cantonal tax administration.

The process in practice

1. Before moving, choose the canton and often discuss the assessment in advance with the cantonal tax administration.
2. Take up residence and register with the municipality and the tax administration.
3. File the expenditure-based tax return every year, stating the expenditure and the income relevant for the control calculation.
4. When circumstances change – gainful activity in Switzerland, naturalisation, a new household – have the conditions reviewed again.

What the family office contributes

Documenting living costs, separating Swiss and foreign income for the control calculation, and clearly assigning assets to persons and structures. FLIORE provides the wealth and structure data; the tax assessment remains with the tax adviser.

At a glance

Frequently asked questions

Sources

• Swiss Federal Tax Administration (ESTV) – taxation based on expenditure
• Fedlex – Federal Act on Direct Federal Taxation (DBG), Art. 14
• Fedlex – Ordinance on taxation based on expenditure for direct federal tax (SR 642.123)
• ESTV – circular on the inflation adjustment for tax year 2026

This page provides orientation and does not replace legal or tax advice. The cited legal sources in their applicable version are authoritative.

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