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Old 11.12.2017, 19:08
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Theoretical Question - Tax on Lottery winnings since the October reform

A question that pops up every now and again, and is pertinent with the recent change to law to bring lotteries and casinos in line.

1. As I understand it, the first 1'000'000fr is now tax free as winnings in a lotto like Euromillion (please set me straight if I'm wrong).

2. The 35% withholding is still in place.

3. On a big win (say 100M in Euromillions) you'll end up paying 11.5% IFD.

4. The Cantonal/Communal taxes are dependent on where you live.

5. There may be a way of optimizing tax by declaring residence in a country with a bilateral tax agreement with Switzerland.

So, for 4, where is the best place to declare residence? Have Cantons like the Jura maintained their special tax. The Jura says 2% (plus quotients) so I guess that means if you're living in Delemont you end up paying 2*(2.85+1.90) in tax (9.5%). Add that to your 11.5 IFD and you're at 21%. Is there anywhere better? Zug? Schwyz?

Anyone have an idea how 5 might work?
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Old 11.12.2017, 19:11
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Re: Theoretical Question - Tax on Lottery winnings since the October reform

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A question that pops up every now and again, and is pertinent with the recent change to law to bring lotteries and casinos in line.

1. As I understand it, the first 1'000'000fr is now tax free as winnings in a lotto like Euromillion (please set me straight if I'm wrong).

2. The 35% withholding is still in place.

3. On a big win (say 100M in Euromillions) you'll end up paying 11.5% IFD.

4. The Cantonal/Communal taxes are dependent on where you live.

5. There may be a way of optimizing tax by declaring residence in a country with a bilateral tax agreement with Switzerland.

So, for 4, where is the best place to declare residence? Have Cantons like the Jura maintained their special tax. The Jura says 2% (plus quotients) so I guess that means if you're living in Delemont you end up paying 2*(2.85+1.90) in tax (9.5%). Add that to your 11.5 IFD and you're at 21%. Is there anywhere better? Zug? Schwyz?

Anyone have an idea how 5 might work?
Do Euro millions whilst living in the UK where lottery winnings are totally tax free, it's available in £ for UK residents.
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Old 11.12.2017, 21:24
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Re: Theoretical Question - Tax on Lottery winnings since the October reform

Hmmm... Leave CH, move to UK, hope to win on Euromillions, then move back and pay tax on what you won... OK.
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Old 11.12.2017, 21:27
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Re: Theoretical Question - Tax on Lottery winnings since the October reform

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Hmmm... Leave CH, move to UK, hope to win on Euromillions, then move back and pay tax on what you won... OK.
There would be no income tax in CH, just wealth tax if you bother to mention whats left
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Old 11.12.2017, 22:44
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Re: Theoretical Question - Tax on Lottery winnings since the October reform

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A question that pops up every now and again, and is pertinent with the recent change to law to bring lotteries and casinos in line.

1. As I understand it, the first 1'000'000fr is now tax free as winnings in a lotto like Euromillion (please set me straight if I'm wrong).
Not yet. Still in the 100 day referendum cool off period.
https://www.bk.admin.ch/ch/d/pore/rf.../20172704.html
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Old 20.12.2017, 10:35
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Re: Theoretical Question - Tax on Lottery winnings since the October reform

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A question that pops up every now and again, and is pertinent with the recent change to law to bring lotteries and casinos in line.

1. As I understand it, the first 1'000'000fr is now tax free as winnings in a lotto like Euromillion (please set me straight if I'm wrong).

2. The 35% withholding is still in place.

3. On a big win (say 100M in Euromillions) you'll end up paying 11.5% IFD.

4. The Cantonal/Communal taxes are dependent on where you live.

5. There may be a way of optimizing tax by declaring residence in a country with a bilateral tax agreement with Switzerland.

So, for 4, where is the best place to declare residence? Have Cantons like the Jura maintained their special tax. The Jura says 2% (plus quotients) so I guess that means if you're living in Delemont you end up paying 2*(2.85+1.90) in tax (9.5%). Add that to your 11.5 IFD and you're at 21%. Is there anywhere better? Zug? Schwyz?

Anyone have an idea how 5 might work?
Quickly people. Now that I've won, where do I have to declare my domicile by year end to optimize the tax?
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Old 20.12.2017, 10:58
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Re: Theoretical Question - Tax on Lottery winnings since the October reform

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Quickly people. Now that I've won, where do I have to declare my domicile by year end to optimize the tax?
so you won a lot of money but don't hire a tax consultant.
instead you rely on anonymous comments on the internet.
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Old 20.12.2017, 11:22
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Re: Theoretical Question - Tax on Lottery winnings since the October reform

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Quickly people. Now that I've won, where do I have to declare my domicile by year end to optimize the tax?
Cheapskate
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Old 20.12.2017, 11:24
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Re: Theoretical Question - Tax on Lottery winnings since the October reform

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Quickly people. Now that I've won, where do I have to declare my domicile by year end to optimize the tax?
City of Zurich. It is taxed as part of your normal income and it would optimize my tax the best

Baar could be the best for you. Tax will be around 34 Mio.
But choosing a smaller town may be advisable as it may affect the future tax rate the most.
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Old 20.12.2017, 11:49
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Re: Theoretical Question - Tax on Lottery winnings since the October reform

Just as an FYI, someone in Zurich won 157 million in yesterday's Euromillion draw.
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Old 20.12.2017, 12:02
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Re: Theoretical Question - Tax on Lottery winnings since the October reform

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so you won a lot of money but don't hire a tax consultant.
instead you rely on anonymous comments on the internet.
Come on guys, it's a game. Do you think if I was really the winner I'd be depending on an internet forum for advice? I'd have spent the morning talking to major banks and trying to track down a top flight tax advisor.
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Old 20.12.2017, 12:08
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Re: Theoretical Question - Tax on Lottery winnings since the October reform

I'd also be interested in see what percentage your take home would be by canton after a big lottery win if anyone could provide it. I always find it odd that in a country that is tax friendly, that you can get so highly "punished" here for a lottery win.
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Old 20.12.2017, 12:20
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Re: Theoretical Question - Tax on Lottery winnings since the October reform

In this theoretical case, you shouldn't be posting this question here but you should be able to afford PWC or Deloitte to provide you advice.
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Old 20.12.2017, 12:21
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Re: Theoretical Question - Tax on Lottery winnings since the October reform

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Come on guys, it's a game. Do you think if I was really the winner I'd be depending on an internet forum for advice?
you should spend some time on this forum and learn about questions people ask here.

btw, it's not you winning the lottery but you are an intermediary for a lucky Nigerian lottery winner, right?
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Old 20.12.2017, 12:26
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Re: Theoretical Question - Tax on Lottery winnings since the October reform

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I'd also be interested in see what percentage your take home would be by canton after a big lottery win if anyone could provide it. I always find it odd that in a country that is tax friendly, that you can get so highly "punished" here for a lottery win.
I agree, and the differences are enormous, which is why I originally posted the question.
I think the worst case is Vaud. Zurich is about the middle, but then there's the low tax cantons like Zug and Schwyz. Also, the Jura has a special taxation on lotto wins.
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Old 20.12.2017, 12:44
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Re: Theoretical Question - Tax on Lottery winnings since the October reform

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I'd also be interested in see what percentage your take home would be by canton after a big lottery win if anyone could provide it. I always find it odd that in a country that is tax friendly, that you can get so highly "punished" here for a lottery win.
AFAIK most cantons treat lottery winnings as part of the normal income. Exception I am aware of is Bern, but that tax is not very favourable. If Geneva has an exception as well it could be rather low, as the Pillar 2 and 3 payout tax is also surprsingly low compared to the income tax level.

Here a commune by commune overview of regualar income tax based on 2015 tax rates. Just select the highest income as the situation above mostly remains the same.
https://blog.tagesanzeiger.ch/datenb...steuerparadies
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Old 20.12.2017, 13:19
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Re: Theoretical Question - Tax on Lottery winnings since the October reform

having to pay tax on a 157m windfall is a problem i wouldn't mind having
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