I doing some very preliminary research into moving to Switzerland. Reducing my tax obligation would be one of several reasons for making the move. From what I have read there are three main taxes levied on retired individuals. I appreciated tax code books are lengthy but is my rudimentary explanation below accurate?

Income
progressive and varies by canton. Income = dividends, interest, rental income, pension.

Capital gains
There is no capital gains tax (this includes gains in shares or funds). There is one exception, real estate owned in Switzerland, which reduces over time.

Wealth
Levied on worldwide assets, excluding real estate.


If the above it correct, then a one could arrange their assets to minimize income and maximize capital gains thereby reducing their tax obligation. But that brings me to my next question, lump-sum tax. On the surface this sounds like a wonderful option but if one is retired and living off investments its seems more beneficial to focus their investments towards capital gains rather than a lump-sum tax. Of course all of this depends on the size of ones assets and amount of income being generated outside of the country.

I'd love to hear what you think and see if my initial thoughts are on the right path.

Mike

With respect to capital gains on investments, you need to be aware that this only applies to private investors, for those classified as professionals it is considered income and taxed in the normal way. Professional status is normally applied at around 10 transactions per month, but other factors may also be taken into account when the tax authorities make the decision.

Good luck with that,

Jim

Jim,

thanks for your reply. I was not aware of the private vs professional status. If most investments were in long term mutual or hedge funds, which would only be adjusted a few times a year, then these would be considered private? Or would the number of funds owned come into play and not just monthly trades, which would be minimal?

Google is your friend in this. Check out this site, especially this page.

Wealth tax is very low at about 0.15% even if your have millions.

If you are a big roller, you may be able to do a deal with the local tax office and pay what you agree upon. Taxes are raised and spent locally in the great part, so many inner-Swiss communites will negotiate.

In Canton Zurich we voted against such deals...

It sounds just fine, but of course it all depends on what the tax office thinks....

Jim