Expats living in Switzerland could be facing higher tax bills come Sunday, as for the second time this year Swiss nationals head to the polls to vote in a referendum on an issue directly related to immigration.
Earlier this year Swiss citizens narrowly voted in favour of limiting EU immigration to the country; now it is tax perks for wealthy expatriates that is up for debate.
For years, Switzerland has offered the rich and famous from all around the world extremely lucrative tax breaks in a bid to attract them to the country. Currently, foreign residents with no gainful activity in Switzerland are charged only a lump sum based on their living expenses, instead of being taxed on their assets or income.
But this could change when the Swiss head to the polls on Sunday to decide on whether to keep this system in place or not.
Earlier this year the ‘Stop the tax privileges for millionaires (abolition of lump-sum taxation)’ campaign garnered the 100,000 signatures needed on a petition to trigger a national vote on the subject. The lump-sum has already been introduced in five of Switzerland’s 26 cantons, including Zurich.
If the lump-sum charge were to be scrapped, then accounting firm KPMG Switzerland’s head of international private client services said many wealthy foreigners would almost certainly look to seek a better tax deal elsewhere.
“Some of our clients, I assume, would stay in Switzerland, the ones that are really personally attached to Switzerland, that enjoy the Swiss lifestyle,” Frank Lampert told Reuters. “Others, I’m quite sure, would leave Switzerland because their main consideration when choosing Switzerland was to find a mild tax regime.”
Article published 27th November 2014