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      What is lump-sum taxation in Switzerland?

      In international tax competition, the special tax regime of Swiss lump-sum taxation is an attractive tax model that attracts wealthy individuals to move to Switzerland.

      Instead of basing taxes on global income and wealth, it uses the taxpayer’s living expenses as a surrogate tax base. This means that it is not necessary to report actual global earnings and assets. Once the tax base has been determined as explained below, it is then subject to ordinary tax rates. The resulting tax planning opportunities can offer very attractive outcomes.

      Unlike ordinary income taxation, which requires full disclosure of global income and wealth, this system offers simplicity and confidentiality, with no need to report actual earnings or assets.

      Hugues Salomé
      Hugues Salomé

      Partner, Head of Private Clients

      KPMG Switzerland

      Philipp Zünd
      Philipp Zünd

      Partner, Private Clients Tax

      KPMG Switzerland

      Who qualifies for Swiss lump-sum taxation?

      To be eligible for lump-sum taxation in Switzerland, an individual must meet the following criteria:

      • Must not be a Swiss citizen

      • Must be taking up residence in Switzerland for the first time or after an absence of at least ten years

      • Must not engage in any gainful activity in Switzerland. Gainful activities abroad are generally permitted, as are functions related to the management of private assets held in Switzerland.

      In the case of married couples, both spouses must independently fulfill all of the above conditions.

      How is the lump-sum tax calculated?

      Under the lump-sum taxation regime, the taxable income base is calculated from the taxpayer’s annual worldwide living expenses, rather than actual income or wealth. 

      However, the taxable base must meet specific minimum thresholds to ensure consistency and fairness. In particular:

      • The base must not be less than seven times the annual rent paid, or the rental value of the taxpayer’s primary residence in Switzerland.

      • At the federal level, the minimum taxable base is currently set at CHF 434,700.

      Cantons impose their own minimum expense thresholds, which can vary significantly. Ticino and Vaud, for instance, are considered relatively favorable due to moderate thresholds and administrative practice. Cantons of central Switzerland (e.g. Obwalden, Nidwalden, Uri, etc.) have positioned themselves in international tax competition and are very attractive.

        The calculated base is then taxed at the ordinary income tax rates applicable in the individual’s canton and commune of residence. The final tax liability is typically confirmed through an individual tax ruling issued by the competent cantonal tax authorities.

        In summary, although the system is based on the cost of living, the higher of the actual living expenses or the 7 times rent/ rental rule (along with any applicable minimum thresholds) will be applied. This framework ensures a degree of flexibility, depending on the taxpayer’s location and negotiations with the local authorities.

          Control calculation & wealth tax implications

          Control calculation 


          Taxpayers under the lump-sum regime are subject to a control calculation as part of their annual tax return. This safeguard ensures that the tax payable based on the agreed lump-sum tax base is not lower than the ordinary tax that would be due on:

          • Swiss-source income, such as rental income from Swiss real estate, dividends and interest from Swiss securities, Swiss pensions, and royalties, and

          • foreign-source income in respect of which the taxpayer claims relief under a double tax treaty.

            Wealth tax implications 


            Lump-sum taxpayers are also subject to cantonal wealth tax, although this is not based on a full declaration of global assets.

            Instead, a minimum taxable wealth base must be established.

            The basis for this assessment is defined under cantonal law and is often calculated as a multiple of the deemed income base.
             
             

              Which cantons still offer lump-sum taxation in 2025?

              Lump-sum taxation offers a very attractive tax set-up for individuals where the annual tax burden can be less than CHF 100,000. However, this amount heavily depends on the taxpayer’s profile, Swiss housing situation and canton specific practices.

              As of 2025, not all Swiss cantons offer lump-sum taxation at the cantonal and communal levels. The following cantons have abolished the regime through political or legislative initiatives: Zurich (ZH), Basel-Stadt (BS), Basel-Landschaft (BL), Schaffhausen (SH) and Appenzell Ausserrhoden (AR).

              Despite abolition at the cantonal level, federal lump-sum taxation remains available in these cantons under Swiss federal tax law. However, in practice, relocating to these jurisdictions is unattractive for lump-sum taxpayers due to full cantonal and communal taxation on worldwide income and wealth.

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              Immigration rules for lump-sum taxpayers

              EU/EFTA Nationals 


              Citizens of EU/EFTA member states may obtain a Swiss residence permit without employment if they:

              • Have adequate financial resources to support themselves (and their dependents) without recourse to Swiss welfare

              • Maintain comprehensive Swiss health insurance

                Non-EU/EFTA Nationals 


                Residence permits for non-EU/EFTA nationals without gainful activity are subject to stricter conditions and cantonal discretion:
                 

                  • Over 55 years of age

                    • Must have close personal ties to Switzerland (e.g. prior residence, family, property ownership)
                       

                    • Must abstain from all gainful employment in Switzerland and abroad
                       

                    • Must demonstrate sufficient financial resources for themselves and their family
                       

                    • Must hold Swiss health insurance

                  • Under 55 years of age

                    • May receive the residence permit based on the preponderant cantonal fiscal interest.
                       

                    • This generally requires a minimum total tax contribution of CHF 200,000 per year, depending on the canton and individual profile.

                       

                  In all cases, lump-sum taxpayers must meet immigration requirements, regardless of their tax arrangements. 

                  FAQs on lump-sum taxation in Switzerland

                  Switzerland does not have a true flat tax, but wealthy foreigners can apply for lump-sum taxation, whereby taxes are based on living expenses rather than actual income and wealth.

                  The 183-day rule is an international tax guideline which states that if you spend more than 183 days in a country in one calendar year, you may be considered tax resident there.

                  Switzerland uses different residency and permit-based rules, which means that no such day-count is applicable, and one can qualify as tax resident in Switzerland spending significantly less than 183 days here.

                  Switzerland taxes wealthy individuals through progressive income and wealth taxes. Eligible foreigners may opt for lump-sum taxation based on their living expenses rather than their actual income wealth.

                  But also under the ordinary taxation, Switzerland is very attractive, as some cantons have maximum income tax rate of 20%. Furthermore, capital gains are generally tax exempt also under the ordinary taxation.

                  Tax liability depends on residency, canton, income and tax status. Under lump-sum taxation, the minimum tax payable can be less than CHF 100,000, plus social security contributions (see next question), if applicable.

                  Yes. Lump-sum taxpayers are generally subject to Swiss social security (AHV/AVS) contributions, based on their tax base and/or global wealth, at approximately CHF 26,500 per year, until retirement age of 65. In specific cases, no Swiss social security contributions are due. 

                  Haven’t found what you were looking for?

                  KPMG’s Private Client team specializes in advising international clients on Swiss lump-sum taxation.

                  With deep expertise and strong ties to tax authorities, we provide tailored and attractive solutions for our clients.

                  Meet our experts

                  Hugues Salomé
                  Hugues Salomé

                  Partner, Head of Private Clients

                  KPMG Switzerland

                  Philipp Zünd
                  Philipp Zünd

                  Partner, Private Clients Tax

                  KPMG Switzerland

                  Rinaldo Neff
                  Rinaldo Neff

                  Director, Private Clients Tax

                  KPMG Switzerland