Swiss to make super-rich pay more taxes

30th June 2011, Comments 0 comments

The Swiss government decided Thursday to make wealthy foreigners pay more taxes, but refused to scrap lumpsum tax deals aimed at attracting the rich to the Alpine nation.

"The Federal Council wants to reform the lumpsum taxation in order to reinforce tax equality and improve this instrument as well as its acceptance," said the government in a statement.

"At the same time, the Federal Council wants to preserve the attractiveness of Switzerland," it added.

Switzerland has been under sharp criticism, particularly from neighbouring countries, for its long-standing tradition of offering tax deals to attract wealthy people here.

The basic prerequisite of lump-sum taxation is that the individual must not work in Switzerland and celebrities who have taken advantage of the deals include Tina Turner, Lewis Hamilton and Isabelle Adjani.

Under the revised rules, Switzerland would raise the taxable base sum from five times to seven times the rental value of the individual's home.

In addition, the taxable base subject to direct federal taxes must reach a minimum of 400,000 francs. Cantonal authorities will also impose a minimum base, although the canton of Zurich had voted to scrap such tax deals in 2010.

About 5,000 people in Switzerland were subject to lump-sum taxation in 2008, including many who had their homes in luxury ski resorts.

The government said that "most of the people subject today to lump-sum taxation will remain in Switzerland" despite the new rules.

"The reform should therefore lead to a rise in the revenues of the Confederation," it added.

© 2011 AFP

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