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  #21  
Old 09.09.2011, 13:24
Nev
 
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Re: Lowest Lump-Sum tax Canton

By far the vast majority of forfaitaires in Vaud are retirees living off their capital and savings. Vaud is pragmatic. These people have to support themselves, don't take from the State, pay AVS and make net positive contribution to local taxes/economy. In short their presence is incremental to the local economy.

In most cases they are not super rich, pay a decent whack of tax relative to income (albeit lower than it would be if they were in employment here) but escape wealth tax. Attempts by socialists in vaud to force a referendum on abolishing the system have not garnered anywhere near enough support from the local people who vote. In fact the last one in 2010 was rejected because of forged signatures on the petitions!!

Many foreigners on lump sum probably get investment and pension income in foreign curriencies. With interest rates at close to zero and the CHF where it is, the value of the forfait to a lot of these people is worth a lot less than it used to be.
As Meloncollie correctly points out, this is not tax evasion/cheating.
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  #22  
Old 09.09.2011, 13:25
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Re: Lowest Lump-Sum tax Canton

I found this:

Switzerland offers you the possibility of paying a fixed amount of taxes every year. This amount is based on your rental payments (or the rental value of your home), and has no relation to your real income or wealth. Actually, you are not even asked to declare your income nor your assets.

This fiscal arrangement is based on Switzerland's federal law and is thus available everywhere in the country. It is called Forfait fiscal in French, or Pauschalbesteuerung in German, which translates as "lump sum taxation". You sometimes also hear the expressions fiscal deal or fiscal arrangement.

This fiscal arrangement is a famous specialty of the Swiss tax system and has been used for decades by many foreigners, including many celebrities.

Who can benefit from lump-sum taxation?
You need to be a Swiss resident with a B or C permit, to be retired and not to have worked in Switzerland for the last 10 years. By retired is meant no day-to-day professional activity. You can oversee your investments but you can work neither in Switzerland nor abroad.

Many cantons have unofficial minimums for the taxable income (see below) before they grant you a residence permit. However, if you are flexible on the selection of the canton, this amount is rather reasonable. As a rule of thumb you should have a taxable income of no less than 150,000 Swiss francs a year to be eligible (equivalent to $134,000 or EUR 102,000 or 94,000).

How is the annual tax computed?
The tax is based on your spending - not your income. In practice, your annual rent is taken as an approximation of your spending. Your taxable income is equal to 5 times this annual rent. You then pay the normal tax rate for the city and canton you live in.

here

They also have a couple of examples on the page to show what one would pay.
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  #23  
Old 09.09.2011, 15:31
Nev
 
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Re: Lowest Lump-Sum tax Canton

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I found this:
drmom,
I think your link is an old one/misleading
It's not an entitlement and it's not available everywhere in Switzerland. Deals are made with the canton in which you live, not with the federal government and it's only available in those Cantons who permit it. Zurich no longer does.
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Old 09.09.2011, 18:24
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Re: Lowest Lump-Sum tax Canton

- Wow, some really good stuff here chaps, many thanks.

And this Mr-attitude-Ittigen is why I asked advise on this 'English Forum', to get some 'been there, done that' guidance prior to my prospective move in about a year's time.

It all 'early doors' for me right now, so some level headed responses from fellow Brits is just the ticket before I approach lawyers and solicit their paid advise.That's not being cheap, that's being prudent - don't you read reviews before you go pay to watch a film? (I mean I wasn't actually even aware that these things went through lawyers as opposed to accountants)

And I certainly won't lose any 'guilt sleep' if the move happens because myself and my family will be consumers of local goods and services, contributing taxes, will never be taking any state handouts or taking any-one's job because I can't work in Switzerland - so its all good.

I'm horribly attracted to the southern section of French speaking Vaud due to its apparent lower taxes and costs as compared to Geneva and its proximity to Geneva.

1) Maybe some-one would like to recommend a decent lawyer in that region who knows how to argue for molehill size lump-sums on behalf of his (or her) clients?

2) If myself and my wife did not work in Switzerland, could my son do so without 'forfeit of our forait'?

Cheers
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  #25  
Old 09.09.2011, 19:08
Nev
 
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Re: Lowest Lump-Sum tax Canton

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1) Maybe some-one would like to recommend a decent lawyer in that region who knows how to argue for molehill size lump-sums on behalf of his (or her) clients?
I think you expect too much of lawyers. The tax authorities will look primarily at the property you rent or buy. That will drive the forfait. For the vast majority of foraitaires, how much you pay doesn't depend on which lawyer you choose. You will buy a house or rent a property and the tax authorities will tell you what your forfait is. They don't engage in hypothetical discussions.

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2) If myself and my wife did not work in Switzerland, could my son do so without 'forfeit of our forait'?
If your son qualifies for a permit under the family reunion rules, then yes he would normally be allowed to work. Whether he qualifies depends on his age. Usually children over 21 don't qualify unless he is financially dependent on you but if he's an EU citizen he can apply for a residence permit under his own his steam, if he can find a job.
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  #26  
Old 09.09.2011, 19:51
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Re: Lowest Lump-Sum tax Canton

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I think you expect too much of lawyers. The tax authorities will look primarily at the property you rent or buy. That will drive the forfait. For the vast majority of foraitaires, how much you pay doesn't depend on which lawyer you choose. You will buy a house or rent a property and the tax authorities will tell you what your forfait is. They don't engage in hypothetical discussions.
It's all negotiable, I know someone who bought a 340m apartment for 7,900,00. They negotiated income down to 400,000 CHF, originally they wanted 525,000
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Old 10.09.2011, 03:52
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Re: Lowest Lump-Sum tax Canton

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It's all negotiable, I know someone who bought a 340m apartment for 7,900,00. They negotiated income down to 400,000 CHF, originally they wanted 525,000

That's one hell of a mark-down. Any idea as to how they did that? Good lawyers, lenient administrators .... and in which Canton did they achieve such a result?
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