Discover the advantages of lump sum taxation in Valais

Taxation on expenditure enables the taxpayer who benefits from it to obtain considerable tax breaks.

Individuals of foreign nationality, who take up tax domicile or tax residence in Switzerland for the first time or after an absence of at least ten years, without being economically active there, can apply to pay tax calculated on expenditure instead of income tax.

In order to obtain a residence permit without being economically active, persons from the European Community or European Free Trade Association (EFTA) must simply prove that they have sufficient means to live and attest that they have health and accident insurance.

Expenditure must be based on the taxpayer’s lifestyle and be not less than seven times the rentable value of the taxpayer’s residence for homeowners and seven times the rent for tenants. 

In Valais, the flat rate basis is a minimum of CHF 250,000.00 for the communal and cantonal tax and a minimum of CHF 400,000.00 for the direct federal tax, with effect from 01.01.2106 (for the new rates). In addition, wealth must represent four times the minimum rate, namely CHF 1,000,000.00. The global tax calculated on the basis of the above elements is around CHF 102,000.00 for a married couple.

Changes to Valais Tax Law (art. 11LF): the basics:

  • Conditions to be fulfilled by the two members of the marriage
  • Restricted to non Swiss nationals.
  • Takes into account expenditure in Switzerland and abroad.
  • Minimum tax base: 7 x rent or net rental value / 60 % x 100 %
  • IFD (Direct Federal Tax): minimum level CHF 400,000
  • ICC ( Communal and Canton Tax) : minimum revenue CHF 250,000
  • ICC: wealth 4 x the minimum rate = CHF 1,000,000
  • Coming into effect 01.01.2016 for the new rates.
  • Coming into effect 01.01.2021 for the old rates.

Adjustments to current rates:

  • In 2016 and for the 2016 accounting  period: everything below CHF 160,000.00
  • In 2017 and for the 2017 accounting  period: everything below CHF 180,000.00
  • In 2018 and for the 2018 accounting  period: everything below CHF 200,000.00
  • In 2019 and for the 2019 accounting  period: everything below CHF 220,000.00
  • From 2019, the minimum rate for people already taxed according to expenditure on 01.01.2016 should be CHF 220,000.

Advantages of residing in Valais with taxation on a lump sum basis :

  • Moderate income tax
  • No wealth tax
  • No taxation on inheritance and gifts made to direct line blood relations, spouses who are not judicially separated and adopted children
  • Acquisition of property not subject to the federal law on the purchase of property by persons resident abroad
  • Property gains tax of a maximum of 3% after a holding period of 25 years

We can negotiate with the relevant authorities to obtain residence permits and the granting of lump sum taxation. Contact us.