Switzerland: lump-sum taxation (the forfait)

• Lump-sum taxation — official overview — Swiss Federal Department of Finance (FDF), 2026
• Swiss lump-sum taxation — eligibility, calculation & updates — KPMG Switzerland, 2026

Background

Switzerland has applied "expenditure-based taxation" (imposition d'après la dépense, the forfait) for over a century. It lets wealthy foreigners becoming residents for the first time pay tax on their lifestyle rather than their global income.

The regime is a constant political dispute: a 2014 nationwide initiative to abolish it was rejected in a referendum, but several German-speaking cantons, starting with Zurich (2009), abolished it locally.

Problem

For someone with large international capital but no active work in the country, ordinary worldwide-income taxation in Switzerland would be punitive. They need predictability and privacy — while holding legal tax-resident status in a stable jurisdiction.

Solution

The forfait is available to foreign nationals taking Swiss tax domicile for the first time (or after at least ten years abroad) who carry on no paid activity in the country. The tax base is the greater of two figures: worldwide living expenses, or seven times the annual rent (rental value) of the Swiss home.

Since the 2016 reform a federal minimum taxable base applies — CHF 435,000 in 2026; cantons set their own minimums. Ordinary federal, cantonal and municipal rates then apply to that base. The final amount is agreed with the tax authority in advance, giving rare predictability.

Result

Tax based not on worldwide income but on living expenses: the base is at least seven times rent and no lower than the federal minimum of CHF 435,000 (2026), for wealthy foreigners not working in Switzerland.

Lessons learned

1. "Expenditure-based tax" is not zero tax: the federal minimum base guarantees a substantial amount even on modest rent.
2. The "no work in Switzerland" condition is the core of the regime: any paid activity in the country removes eligibility for the forfait.
3. The regime is politically fragile: what applies in one canton can be abolished by a vote in a neighbouring one.

Frequently asked questions