What is the Swiss lump sum taxation program?
Switzerland offers a unique regime for wealthy foreign nationals who wish to take up residence without engaging in gainful employment. Known as lump-sum taxation (or expenditure-based taxation), this program allows qualifying individuals to pay income and wealth taxes based on their worldwide living expenses rather than their declared global income or net assets.
The regime is enshrined in federal law and, where available, is also applied at cantonal and communal levels.
Who can apply?
The program is available to non-Swiss nationals who take up residence in Switzerland for the first time, or after a long absence, and who do not work in Switzerland.
Applicants must agree to an annual lump-sum tax payment, which varies by canton but starts at CHF 150,000 and can reach CHF 1 million or more depending on personal circumstances and canton-specific rules.
Spouses are assessed jointly, and both must meet the eligibility conditions.
How Prism can assist you
We guide you through every step of the process, ensuring clarity, compliance, and efficiency:
- Eligibility check – nationality, residence history, and planned activities in Switzerland are decisive factors.
- Canton selection – minimum amounts and wealth tax multipliers differ, making the choice of canton a critical decision.
- Control calculation modelling – to compare lump-sum vs. ordinary taxation outcomes, especially if you expect Swiss-source income.
- Documentation of expenses – the agreed base hinges on your lifestyle profile and housing cost benchmarks such as the seven-times-rent rule.
- Residence permits – Prism assists with the immigration process, ensuring tax and residence procedures align.
For EU/EFTA nationals, residence is typically granted on the basis of financial independence and insurance coverage. For third-country nationals, certain cantons grant residence on public-interest grounds if economic contribution expectations are met.
Benefits of the Swiss lump sum taxation program
- Predictable tax liability, based on lifestyle expenditure.
- Swiss residence permit for you and your family (spouse, children, and grandchildren under 21).
- No obligation to declare worldwide income and assets if the lump sum is paid.
- Ability to purchase Swiss real estate without prior approval.
- Access to Switzerland’s world-class healthcare system and high life expectancy.
- Switzerland’s VAT rate is among the lowest in Europe (below 10%).
- Multicultural environment with four official languages, and English widely spoken.
- Stable property market with consistent growth over decades.
- Switzerland’s reputation as one of the most stable democracies, with top rankings in quality of life, competitiveness, and human development.
Requirements for citizens of the EU/EFTA without a work permit
- Applicants must not have a job in Switzerland under this program, however, you can be a shareholder of Swiss companies.
- First time residence in Switzerland and foreigner shouldn’t have resided in Switzerland for the last 10 years
Required documents & processing time
The lump-sum tax is calculated by the authorities using standardized formulas and personal data. Requirements include:
- Proof of personal circumstances (family, housing, lifestyle).
- Agreement on annual lump-sum tax (minimum CHF 150,000; actual amount depends on canton and profile).
- Confirmation of financial independence and absence of Swiss economic activity.
Processing time: typically 4 to 6 months from application to residence permit issuance.
Advantages of residency in Switzerland
- One of the most developed countries in the world with leading standards in transparency, competitiveness, and civil liberties.
- Among the highest nominal wealth per adult globally.
- Swiss cities consistently rank among the top cities worldwide for quality of life.
- Home to major international organizations, including the UN’s second-largest office.
- A founding member of EFTA and active in global diplomacy while maintaining its neutrality.
- A safe haven for investors with long-term currency stability and a respected financial system.
Prism supports high-net-worth individuals in structuring their move to Switzerland. Contact us to discuss whether the Swiss lump sum taxation program fits your profile and goals.
