Swiss lump sum taxation, also called the forfait fiscal in French or Pauschalbesteuerung in German, is one of the most talked-about ideas among people planning a move to Switzerland. It is also one of the most misunderstood. This page explains the basic idea in plain words, who it is generally meant for, and where the limits are. It is an overview, not a tax plan.
A quick note before we start. Lump-sum taxation is a niche arrangement. Most people who arrive in Switzerland, including most families, are taxed in the ordinary way. If you are still deciding how a move should be organized overall, the page on lump sum or managed move looks at a different topic, namely relocation budgets paid by employers.
The idea in one minute
Under ordinary taxation, the tax authority looks at the income and assets a person actually has. Under lump-sum taxation, the tax is instead based on the person's living costs in Switzerland, which are treated as a stand-in for income. The word "lump-sum" refers to this fixed basis, agreed with the cantonal tax authority, rather than a bill that follows every foreign dividend or rental payment.
In practice, that means the arrangement is mainly about people whose financial life is mostly outside Switzerland and who are not earning a living here. The exact rules, the way the basis is set and the way it is reviewed are decided by law and by each canton. A specialist can explain how they work in a particular canton.
Who it is generally meant for
Lump-sum taxation exists for people who move to Switzerland to live, but do not carry out paid work in Switzerland. Typical examples, all fictional:
- A couple from London who have sold a business, plan to live quietly by a lake and do not intend to work in Switzerland.
- A retired couple from the United States who want to be close to their grandchildren, who now live in Zurich.
- A family from Singapore whose income comes from investments abroad, with two children entering a local school.
The arrangement is not an option for most employees. Someone arriving on a Swiss employment contract is taxed in the ordinary way, and the page on tax at source shows how that works for new arrivals. Likewise, someone who simply wants a lower bill cannot choose it freely: conditions apply, and the authority decides.
How it differs from ordinary taxation
The table below gives a simple, non-numerical picture. It is a general guide only.
For a first look at what ordinary taxation involves, read about your first Swiss tax return.
What the move looks like, in order
Whichever taxation route applies, the sequence of arrival steps is the same. Here is the usual order, step by step.
- Before leaving home. Gather identity documents, proof of where income comes from, and any records a tax authority might ask about. The permit finder shows which type of permit generally fits a situation.
- Residence permit. Switzerland has two regimes: citizens of EU/EFTA countries (under the free movement agreement) and citizens of other countries. Which one applies depends on nationality, and the State Secretariat for Migration (SEM) describes the second regime on its website.
- Arrival. The commune of residence is notified within 14 days of arrival (ch.ch). The local office usually asks for an identity document, the residence or work permit and proof of health insurance. The exact practice can vary by commune and canton.
- Health insurance. Basic health insurance is compulsory for everyone living in Switzerland, and it is taken out within three months of settling. If that period is met, cover is backdated to the arrival date, and premiums are due from then (FOPH).
- Tax questions. Questions about lump-sum taxation are raised with the cantonal tax authority, usually before or right around arrival, since the arrangement is tied to the start of Swiss residence.
The sample timeline shows how these steps fit into the months around a move.
Things lump-sum taxation does not change
Taxation is only one part of life in Switzerland. The arrangement does not change several other things:
- Residence permits. The permit is a separate decision, made by the migration authorities. Nothing about taxes makes a permit automatic.
- Health insurance. Basic cover is compulsory for people living in Switzerland, whichever way they are taxed.
- Pensions. Rules for the state pension and the other pension pillars follow their own logic, explained in AVS and the three pillars.
- Tax in the country you left. Some countries tax their citizens or residents on worldwide income. US citizens, for instance, remain in the US tax system wherever they live, so both countries' rules are looked at together by a specialist who knows both.
Points worth understanding before you decide
Several practical points come up again and again for people from the UK, the US, India and the Gulf.
It is a conversation with the canton. Lump-sum taxation is agreed with the cantonal authority, not chosen from a drop-down menu. The authority looks at the facts of the household before deciding.
Canton matters. Not every canton offers it, and where it exists the details differ. This is one reason the city comparison tool and the pages on living costs are useful early on. See also the cost of living in Switzerland.
Spouses and children are part of the picture. The household is usually looked at as a whole, so the situation of a partner matters.
Work changes the answer. A person who later starts paid work in Switzerland may find that the arrangement no longer fits. Plans for a business or a job are worth raising at the start.
Comparisons depend on the home country. For readers coming from the United States, the page on Switzerland or the US gives context on daily costs. Readers from the United Kingdom will find similar context in Switzerland or the UK.
A short preparation checklist
- Write down where each source of income and each major asset is held today
- Collect identity documents, marriage and birth certificates for the whole household
- Ask the home-country tax authority how leaving the country is treated
- Note whether any member of the household plans to work in Switzerland
- List the cantons under consideration and note where each is located
- Check which permit route is likely, with the permit finder
- Ask for a specialist's view through the request at the bottom of the page
Frequently asked questions
What is lump-sum taxation in Switzerland?
It is a special tax arrangement for some people who live in Switzerland without working there. Tax is based on living costs rather than on actual income and assets. It is set with the cantonal tax authority.
Is the forfait fiscal the same thing?
Yes. Forfait fiscal is the French name, Pauschalbesteuerung the German one, and "taxation according to expenditure" is a more literal English wording. All describe the same idea.
Who is lump-sum taxation designed for?
It is designed for people who settle in Switzerland and do not carry out paid work there. Retirees, investors and families with income from abroad are the typical examples, though the conditions are set by law.
Can anyone moving to Switzerland ask for it?
No. Conditions apply, and the cantonal authority decides on each case. A specialist can explain which conditions are usually looked at.
Does it work for people who plan to work in Switzerland?
Generally not. The arrangement is tied to the absence of paid work in Switzerland. People with a Swiss employment contract are taxed in the ordinary way, often with tax at source.
Is it available in every canton?
No. Availability depends on the canton, and rules differ. Checking this early helps when comparing places to live.
Who decides whether it applies?
The cantonal tax authority. A website, a relocation company or an employer cannot grant it.
When is it arranged?
Usually around the start of Swiss residence, so it is raised early rather than after the first tax year. The canton explains the timing.
Does it cover health insurance?
No. Basic health insurance is compulsory within three months of settling in Switzerland, whichever way tax is calculated (FOPH). Cover is backdated to arrival if the period is met.
Does it replace the state pension system?
No. Pension rules are separate. The page on AVS and the three pillars explains the system in plain words.
Does it apply to US citizens?
It can be discussed, but the US tax system follows its citizens abroad. That means Swiss and US rules are looked at together, which is a job for a specialist familiar with both.
What about people moving from the UK?
The arrangement is not limited by nationality, but the conditions are the same as for everyone. UK tax rules on leaving the country are a separate matter.
Is it relevant for people from India, Singapore or Hong Kong?
It can be, if the person will live in Switzerland without working there. Nationality and the tax rules of the home country both play a role. See also the pages from Singapore and from Hong Kong.
What about people from Japan or South Korea?
The same logic applies. The home country's rules on tax residence are a separate question. The pages from Japan and from South Korea cover the move itself.
Can a spouse and children be included?
The household is generally looked at together. How a partner's income or activity is treated is a point to clarify with the authority.
Is it the same as tax at source?
No. Tax at source is deducted from salary for certain foreign employees. Lump-sum taxation is for people without Swiss paid work. Read more on tax at source.
Is a tax return still filed?
That depends on the canton and the arrangement. A specialist can say what applies. For the ordinary system, see your first Swiss tax return.
Can the arrangement end?
Yes. Circumstances change, for example if paid work in Switzerland begins. Ordinary taxation then generally applies.
Which documents are worth preparing from abroad?
Identity documents, civil status certificates, proof of where income comes from and records of major assets. The authority tells the applicant what else it needs.
Does it affect the residence permit?
Taxation and permits are separate decisions by separate authorities. SEM describes the two permit regimes, for EU/EFTA and non-EU/EFTA citizens.
Is it legal?
Yes. It is a recognized arrangement in Swiss law. Its use and conditions are debated politically, and some cantons have changed their approach.
What happens in the first 14 days?
The commune of residence is notified within 14 days of arrival, with identity document, permit and proof of health insurance (ch.ch). Practice can differ by commune.
How can a specialist help?
A specialist reviews the situation, the home-country rules and the canton, then explains the options. The request at the bottom of this page starts that conversation.