Campaigners’ demand to abolish the regime of forfait (lump-sum) tax concession for wealthy foreign residents has been summarily rejected by the Swiss Federal Council.
Campaigners have argued that foreigners living in Switzerland should be taxed on the basis of their income and assets, like other taxpayers.
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The Council said that abolishing expenditure-based taxation would disproportionately affect the four cantons (Vaud, Valais, Geneva and Ticino) where 76% of all taxpayers subject to the regime live.
The federal referendum on the initiative to abolish lump-sum tax is scheduled take place on 30 November 2014.
If the new law is accepted, the state will be required to issue implementation regulations within three years. Until then, lump-sum tax under the old law will be maintained.
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