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Flat Tax Rate for Foreigners Living in Switzerland

One of the most attractive tax products for foreign individuals living in Switzerland is the flat tax rate or lump sum taxation.

The flat tax rate is negotiated with the canton tax authorities. You are taxed on your spending and not your earnings. Your annual housing costs form the basis of the calculation. If you own your own home the official net value is taken into consideration. Your taxable income is a multiple of this amount which results in a flat tax rate. This tax scheme is based on Swiss federal law and is therefore applicable in all cantons (except Zurich).

Individuals from abroad can apply for flat rate taxation if they move to Switzerland for the first time or after an absence of at least ten years and have no gainful employment in Switzerland.

Individuals with flat rate taxation are exempt from having to declare foreign assets and income to the Swiss tax authorities. However, they must declare assets and income from domestic sources.

Example

Apartment in Switzerland: 2,000* EUR per month/24,000 CHF per year x 5 = 120,000 EUR. By taking a marginal tax rate on taxable income of 30%, the flat tax would amount to approx. 36'000 EUR.

* This figure can strongly vary depending on location and region. Please also not the quotas have been reduced by the federal authorities for 2010 because of strong demand what also can have an influence on flat tax to pay

Each canton has its own tax system and the general conditions can vary heavily from one region to another when it comes to the availability of real estate or residence permits for non-EU citizens. Please consider this when choosing a location! Moreover, the massive immigration from the EU area in recent years has triggered a new federal policy. Annual quotas for non-EU citizens have been reduced by 50% to only 5,500 permits in 2010. These shortages may lead to impediments which have to be taken into account.

Lemur-Scouting GmbH is specialized in assisting foreigners to settle in Switzerland. Benefit from the experience and discretion of Lemur Scouting GmbH and contact us.You will not regret it.

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