Pauschalbesteuerung / Forfait Fiscal
Lump-sum taxation in Switzerland.
DBG Art. 14. Foreign nationals only.
Switzerland's lump-sum taxation regime (Pauschalbesteuerung / forfait fiscal / tassazione secondo il dispendio) provides qualifying foreign nationals with a fixed taxable base instead of ordinary worldwide income taxation. The base is the highest of seven times annual rent, the federal minimum (CHF 400,000 under DBG Art. 14), or the canton-specific minimum. No gainful employment in Switzerland is permitted. Available in Zug, Vaud, Valais, Ticino, Geneva, and most other cantons — but abolished in Zurich, Basel-Stadt, Basel-Landschaft, Schaffhausen, and Appenzell Ausserrhoden.
DBG Art. 14
Governing statute
CHF 400k
Federal minimum base (DBG Art. 14)
Available in Zug
Our home canton
Foreign nationals
Eligible persons only
Eligibility
Who qualifies for lump-sum taxation?
four eligibility gates, all required
All four conditions must be satisfied simultaneously. Failing any single gate disqualifies the application regardless of how well the remaining criteria are met.
Foreign national
Lump-sum taxation is available only to non-Swiss nationals. Swiss citizens may not use this regime, regardless of prior residence abroad. The ten-year-absence rule relaxes only the residence-timing condition for foreign nationals; it does not create an exception for Swiss citizens, who are excluded under DBG Art. 14 para. 1 lit. a whether or not they previously lived abroad.
DBG Art. 14 para. 1
First-time Swiss residence (or 10-year absence)
The applicant must be taking up Swiss tax residence for the first time, OR returning after an uninterrupted absence of at least 10 years during which no Swiss tax domicile existed. Prior Swiss residence (even brief) within the 10-year window disqualifies the application.
DBG Art. 14 para. 1
No gainful employment in Switzerland
The applicant must not pursue any gainful activity in Switzerland — neither employed nor self-employed. Swiss-source business income of any kind disqualifies the regime. Passive income (dividends, interest, royalties from abroad) is permitted. Swiss board directorships are a borderline case and require advance disclosure to the cantonal tax authority.
DBG Art. 14 para. 1
Eligible canton of residence
The applicant must take up residence in a canton that still offers lump-sum taxation. Several cantons abolished the regime following cantonal referendums. Residence in an abolished canton means ordinary Swiss taxation applies, regardless of federal law eligibility. The canton where physical residence is established determines availability.
StHG Art. 6
Base Calculation
How the taxable base is calculated
the 7× rent rule and federal floor
The lump-sum taxable base is the highest of three values: seven times the annual rent, the federal minimum (CHF 400,000 under DBG Art. 14, indexed to CHF 435,000 for 2026), or the canton-specific minimum. The annual control calculation (Kontrollrechnung) then ensures the base remains adequate relative to actual income streams.
7× annual rent rule
Annual rent paid × 7
The taxable base equals at least seven times the annual rent paid for the Swiss residence. For owner-occupiers, seven times the annual rental value (Eigenmietwert) of the property is used. If the applicant pays CHF 144,000/year in rent, the minimum taxable base from the rent rule is CHF 1,008,000.
Federal minimum base
CHF 400,000
At federal level the minimum taxable base is CHF 400,000 under DBG Art. 14. This statutory amount is indexed for inflation: for tax year 2026 the adjusted federal minimum is CHF 435,000 (per cantonal tax administration figures, as of 2026). The amount is revised each year, so confirm the current-year figure with the cantonal tax authority.
Cantonal minimum base
Varies by canton
Cantons set their own minimum taxable base for cantonal and communal tax. In Zug, the minimum taxable income under the regime is CHF 420,000 for EU/EFTA nationals or CHF 1,000,000 for non-EU/EFTA nationals, alongside a minimum taxable wealth (as of 2026, per Zug tax practice). Where the cantonal minimum exceeds the federal floor, the cantonal figure governs. The taxable base is the highest of: 7× rent, the federal minimum, or the cantonal minimum.
Control calculation (Kontrollrechnung)
Annual cross-check
Each year, the taxable base must not be less than the actual amounts of certain Swiss-source and worldwide income items (pension, property rental, etc.). The Kontrollrechnung ensures the lump-sum base remains at least as large as "normal" taxation would have produced on actual income streams. This is a separate annual calculation, not a one-time agreement.
Worked example — Single applicant renting in Zug at CHF 12,000/month
Source: Taxolution 2026 tax model. Illustrative only — actual tax depends on commune, applicable rate tables, and the Kontrollrechnung outcome. Consult a tax adviser before relying on these figures.
Key Data
Swiss Lump-Sum Taxation — Key Parameters
Pauschalbesteuerung for qualifying foreign nationals
7×
Annual rental value multiplier
Tax base = 7× Swiss annual accommodation cost (or worldwide living expenses if higher).
CHF 400K+
Typical minimum tax base
Federal statutory minimum CHF 400,000 since 2016 (DBG Art. 14), indexed for inflation to CHF 435,000 for 2026. Cantons may set a higher minimum.
Non-active
Eligibility requirement
Applicant must not be gainfully employed in Switzerland.
1862
System established
One of Switzerland's oldest preferential tax arrangements — over 160 years of continuity.
Cantonal Availability
Which cantons offer
lump-sum taxation?
Five cantons abolished lump-sum taxation between 2009 and 2014 — four by popular vote (Zurich, Schaffhausen, Appenzell Ausserrhoden, Basel-Landschaft) and Basel-Stadt by cantonal parliamentary decision. The remaining 21 cantons continue to offer the regime under federal DBG Art. 14 and StHG Art. 6, subject to canton-specific minimum base requirements.
Canton
Status
Cantonal minimum base
★ Goldblum & Partner AG is based in Zug. Cantonal minimum base figures are set by each canton and adjusted periodically; confirm the current-year figure with the cantonal tax authority before application.
What It Costs
Minimum annual tax liability
by applicant type
EU/EFTA nationals
CHF 100,000–CHF 160,000/year
Practical minimum annual tax, lower-tax cantons (e.g., Vaud, Valais). Based on federal floor × applicable rate.
Source: Charles Russell Speechlys (Dec 2024)
Non-EU/EFTA nationals
CHF 250,000–CHF 400,000/year
Higher minimum due to more stringent cantonal base requirements and permit conditions. Range reflects variance across accepting cantons.
Source: Charles Russell Speechlys (Dec 2024) / PwC 2025
Treaty partners requiring the modified lump-sum regime
Nationals from these countries may still access lump-sum taxation, but must demonstrate Swiss tax actually paid to claim DTT benefits in their home country.
FAQ
Frequently asked
questions
Precise answers to the most common questions about forming a company in Switzerland. For specific advice on your structure, book a free consultation.
Free consultationRelated guides
Official Sources
- Federal Act on Direct Federal Taxation (SR 642.11)
Primary statute for lump-sum taxation: DBG Art. 14 fixes the federal minimum taxable base (CHF 400,000, indexed to CHF 434,700 for 2025), with StHG Art. 6 governing the cantonal equivalent.
- ESTV — Federal Tax Administration
Issues the periodic federal minimum taxable base and lump-sum (expenditure-based taxation) guidance; needed to confirm the 2026 figure and the…
Free Consultation
Ready to incorporate
in Switzerland?
Speak with a Zug advisor. We'll review your structure, recommend the optimal entity type, and outline the timeline. No commitment — no pricing barrier at entry.
Baarerstrasse 25 · 6300 Zug · Switzerland · Est. 2007