Flat rate taxation

This article deals with Swiss law. For other forms of flat-rate taxation, see flat-rate tax .

The lump-sum taxation (Fr .: Imposition d'après la dépense , Ital .: Imposizione secondo il dispendio ) or short flat tax or flat tax is a rule of the Swiss income tax law . It stipulates that foreign nationals who are resident in Switzerland but are not gainfully employed there can be taxed on the basis of their (living) expenses, instead of, like all other taxpayers, on the basis of their income and assets. At the end of 2014 there were 5,382 people in Switzerland who were taxed at a flat rate. The income from flat-rate taxation in 2014 amounted to CHF 740,000,000 with an average income per person taxed on expenses of CHF 137,495.

“Flat-rate taxation has a positive effect on wealthy and financially strong people from abroad, because z. B. filling out tax returns with worldwide income and assets is no longer necessary. The general assessment of taxable income and assets can also result in a tax advantage. Another advantage is that the Canton of Uri does not levy any inheritance or gift taxes at all on gifts or inheritances to direct descendants. "

- Canton Uri - Department of Economic Affairs : Fact sheet on flat-rate taxation of natural persons

history

In 1862 the canton of Vaud was the first canton to offer foreigners who were not gainfully employed a special type of taxation due to their tourist and economic interests. The canton of Geneva has had expense taxation since 1928, the federal government since 1934.

Expense taxation was born on December 10, 1948, when the cantons agreed on uniform rules for the application of expense taxation with the conclusion of the “intercantonal concordat on the exclusion of tax agreements”, which the federal government followed a year later. The main aim of the Concordat was to reduce the increased competition between the cantons and communes, because a variety of cantonal regulations led to very different legal provisions in the first half of the 20th century. At the same time, the Concordat also contained a regulation that gave the Concordat cantons the competence to provide legally regulated tax relief for certain groups of taxpayers. This also included expense taxation.

On December 14, 1990, expense taxation was finally enshrined in the Federal Act on Direct Federal Taxes (DBG; SR 642.11) and in the Federal Act on the Harmonization of Direct Taxes of the Cantons and Municipalities (StHG; SR 642.14).

Legal position

For direct federal tax, taxation based on expenditure has been regulated since January 1, 1995 in Art. 14 DBG. Based on this, the Swiss Federal Council issued an ordinance. It regulates the regulations required to collect the tax. The FTA has issued the Circular no. 9 of 3 December 1993 guidelines for the application of this legal basis, which find application in 1995/1996 since the tax period. At canton level, taxation is regulated according to the expenditure in Art. 6 StHG. Based on the DBG, it defines the framework conditions that are binding for all cantons. This has the effect that the cantonal regulations are essentially the same. The details result from the respective cantonal tax laws.

Subjective requirements

A natural person who would like to claim taxation based on the expenditure has to meet special personal requirements:

• They must take up their tax domicile or stay in Switzerland for the first time or after at least 10 years of absence from the country and
• may not pursue any gainful activity there.

Individuals are entitled to tax based on expenditure regardless of their nationality until the end of the current tax period. For non-Swiss citizens, the DBG also provides for this taxation in subsequent periods. The cantons can also continue to grant this taxation to non-Swiss citizens.

Objective requirements

The tax base is not the worldwide income, but the annual cost of living of the taxpayer and the people he supports and lives in Switzerland.

Since January 1, 2016, the minimum expenditure has generally been 7 times the rent of the taxpayer's apartment or the imputed rental value . If the taxpayer does not own property in Switzerland, usually three times the board price for accommodation and meals must be taken into account. A minimum assessment basis of 400,000 Swiss francs applies.

The assessment is supplemented by a control calculation, which ensures that the tax based on the expenditure is not lower than the ordinary taxes on income from Swiss sources and foreign income for which benefits from existing double taxation agreements are claimed. At canton level, this control calculation also includes the assets located in Switzerland.

Legal situation in the cantons

Legal situation and scope of flat-rate taxation in the cantons (as of 2014)

Canton	Flat rate taxation possible	Number of flat-rate taxpayers	Tax income in CHF million
Zurich	No	-	-
Bern	Yes	200	27.90
Lucerne	Yes	113	19.30
Uri	Yes	10	0.97
Schwyz	Yes	83	17.80
Obwalden	Yes	39	5.60
Nidwalden	Yes	61	8.50
Glarus	Yes	4th	0.25
train	Yes	106	21.30
Freiburg	Yes	95	4.00
Solothurn	Yes	8th	0.50
Basel city	No	-	-
Basel-Country	No	-	-
Schaffhausen	No	-	-
Appenzell Ausserrhoden	No	-	-
Appenzell Innerrhoden	Yes	20th	1.66
St. Gallen	Yes	55	8.10
Grisons	Yes	264	46.98
Aargau	Yes	23	1.92
Thurgau	Yes	87	8.70
Ticino	Yes	955	109.00
Vaud	Yes	1260	203.78
Valais	Yes	1231	90.07
Neuchâtel	Yes	36	3.90
Geneva	Yes	696	158.00
law	Yes	36	2.08

Abolition of flat-rate taxation

Cantonal initiatives

In February 2009, an initiative by the Alternative List in the canton of Zurich led to the abolition of the cantonal flat-rate tax there. 52.9 percent of those entitled to vote supported the abolition of the flat tax against the recommendation of the Zurich Cantonal Council and the Government Council . As a result, a little less than half of the people previously taxed at a flat rate actually left the canton. In addition, flat-rate taxation has already been abolished in the cantons of Schaffhausen , Appenzell Ausserrhoden , Basel-Land and Basel-Stadt . The cantons of Schwyz , Lucerne , Bern , Nidwalden , Appenzell Innerrhoden , Glarus and Thurgau have confirmed flat-rate taxation in referendums, but the provisions have been tightened in all cantons, in some cases through accepted counterproposals. In St. Gallen , the abolition and a counter-proposal were accepted by the people, with the counter-proposal winning in the key question. In ten cantons ( UR , ZG , FR , SO , GR , AG , TI , VD , VS and GE ), flat-rate taxation was confirmed in the cantonal parliaments.

The Social Democratic Party of Switzerland decided at its delegates' meeting on 28 March 2009 in Switzerland to tackle for the abolition of the flat tax, and launched it in various cantons popular initiatives.

National popular initiative to abolish the flat tax

→ Main article : Federal popular initiative "Ending tax privileges for millionaires (abolition of flat-rate taxation)"

In March 2011, the Alternative Left finally decided to launch an initiative to abolish flat-rate taxation at national level. This initiative was submitted to the Federal Chancellery on October 19, 2012; it will be voted on on November 30, 2014. The AL , SolidaritéS , PdA , SP , Greens , EPP , Piraten , SD , Travail.Suisse , Unia and the Swiss Federation of Trade Unions support the initiative. They argue that the flat tax is undemocratic because it breaks with the principle of taxation based on economic efficiency and is therefore an unjust tax privilege. The flat tax also acts as a price driver on the real estate market. The argument that flat-rate taxable persons could simply change the canton or the seaside if they were abolished is no longer applicable.

The CVP , FDP , SVP , BDP , GLP , Lega , Finance Directors' Conference, Swiss Trade Association and economiesuisse oppose this . They point out that flat-rate taxpayers pay taxes of 1 billion francs, secure 22,000 jobs and support charitable projects worth 740 million francs a year. The initiative is also an interference with the tax autonomy of the cantons.

The proposal of the popular initiative to abolish flat-rate tax throughout Switzerland was rejected on November 30, 2014 with 59.2 percent votes against.

Comparable foreign rules

Other states also want to attract more wealthy taxpayers. The best-known example is Great Britain, where for certain foreigners only the part of the income transferred from abroad to Great Britain is taxable. The British “ non-dom system ” (£ 30,000 flat-rate tax) is - even if not directly comparable - in some cases more advantageous because, unlike in Switzerland, it allows temporary employment. Many foreigners who have worked in the UK for a few years benefit from this scheme.

A comparable regulation was introduced in Italy in 2016 (with effect from 2017). Foreign taxpayers who move to Italy are taxed at a flat rate of € 100,000 upon request. This means that all of your foreign income is definitely taxed in Italy. They can also include their relatives in this flat-rate taxation system, with an additional € 25,000 in taxes then incurred. The prerequisite is that the taxpayer concerned has not been resident for tax purposes in Italy for more than one year in the last 10 years. This flat-rate scheme can be used for a maximum of 15 years and can be canceled by the taxpayer at any time.

literature

• Marco Bernasconi: Flat rate taxation. Schulthess, Zurich 1983, ISBN 3-7255-2290-1 .
• Carol Gregor Lüthi: Taxation based on expenditure in Switzerland - A systematic classification in Swiss tax law with current reference. BoD, Norderstedt 2017, ISBN 978-3-7431-7543-3 .

Web links

• Federal Act on Direct Federal Taxes, Art. 14 Taxation according to expenditure
• Federal law on the harmonization of direct taxes of the cantons and communes, Art. 6 Taxation according to expenditure
• Website of the popular initiative "No more tax privileges for millionaires (abolition of flat-rate taxation)"
• Website of the committee "NO to the flat-rate taxation initiative"

Individual evidence

1. ↑ ^{a b} Less taxed on expenses but higher income in the cantons ( Memento of the original from October 18, 2016 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. , Conference of Cantonal Finance Directors, May 26, 2015, accessed on October 18, 2016 
2. ↑ ^{a b} Welcome to your success! Enjoy advantages in the natural wonderland of Uris ( Memento of the original from October 17, 2016 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. , Canton of Uri - Department of Economic Affairs, accessed on October 17, 2016 
3. ↑ This section is based on the Federal Council's dispatch on the Federal Act on Taxation According to the Expenditure of June 29, 2011, BBl 2011 6021 (PDF; 210 kB). Their text is in the public domain.
4. ↑ SR: 642.123 Ordinance on taxation based on the expenditure for direct federal tax of March 15, 1995 (PDF; 11 kB)
5. ↑ SR: 642.14 Federal Act on the Harmonization of Direct Taxes of the Cantons and Municipalities of December 14, 1990 (PDF; 251 kB)
6. ↑ Federal Department of Finance: Fact sheet taxation based on expenditure as of April 2016, accessed on October 17, 2016
7. ↑ Vista Curia - Business Database Taxation according to expense
8. ^ Fabian Schäfer: Flat tax: These cantons must tremble , Tagesanzeiger, October 29, 2014, accessed on October 17, 2016
9. ↑ Appenzell Ausserrhoden from January 1, 2013 without flat-rate taxation Appenzell Ausserrhoden, media releases from the cantonal administration, April 10, 2012, accessed on October 17, 2016
10. ↑ Geneva residents stick to flat-rate taxation , SRF, October 30, 2014, accessed October 17, 2016
11. ↑ Zürcher Tagblatt: Zurich abolishes flat-rate tax ( memento of September 7, 2009 in the Internet Archive ), of February 8, 2009.
12. ^ DRS: Many people taxed at a flat rate leave the canton of Zurich
13. ↑ KPMG: Flat rate taxation in Switzerland. Retrieved October 21, 2014.
14. ^ No to the popular initiative "Ending tax privileges for millionaires (abolition of flat-rate taxation)" - arguments from a cantonal perspective. (No longer available online.) P. 5 , archived from the original on October 26, 2014 ; accessed on October 7, 2014 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.  
15. ^ Zürcher Tagblatt: SP launches initiative against flat tax , from March 20, 2009.
16. ↑ Five reasons to abolish the flat-rate tax. Retrieved October 15, 2014 . 
17. ↑ Line under the millionaire privilege. ( Memento of the original from October 31, 2014 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. from: pauschalsteuer- Abschaffen.ch , October 21, 2014, accessed on October 22, 2014. 
18. ↑ No to the flat-rate taxation initiative - arguments. (No longer available online.) Archived from the original on October 26, 2014 ; accessed on October 7, 2014 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.  
19. ^ Peter Hilpold: Italian tax law - general part . 2nd Edition. Facultas / Nomos / Dike, Vienna / Baden-Baden / Zurich 2017, ISBN 978-3-7089-1368-1 , pp. 273 .
20. ^ Peter Hilpold / Walter Steinmair: Outline of Italian tax law . 5th edition. Manz / CH Beck / Schulthess / Athesia, Vienna / Munich / Zurich / Bozen 2017, ISBN 978-3-214-02476-5 , p. 491 .

Please note the information on legal issues!