Individual Taxation

Clarity for lump-sum taxpayers in Switzerland with Norwegian source income

Many Swiss cantons offer the possibility of taxation on a lump-sum basis to non-Swiss high-net worth individuals. There are often uncertainties surrounding whether individuals living in Switzerland under the lump-sum tax regime can benefit from the provisions of a Double Taxation Treaty (DTT). The key question here is whether a lump-sum taxpayer qualifies as a tax resident within the meaning of the DTT even though he/she is not subject to ordinary taxation in Switzerland.


Statement by the Norwegian Ministry of Finance

On 30 June 2023, the Norwegian Ministry of Finance released a statement confirming that individuals who are taxed based on the modified lump-sum regime in Switzerland, are recognized as Swiss tax residents under article 4 of the DTT between Switzerland and Norway. This development allows modified lump-sum taxpayers in Switzerland to reclaim 10% of the 25% Norwegian withholding tax (Kupongskatt) on Norwegian source dividends. Switzerland will grant a tax credit for the remaining non-recoverable Norwegian residual tax of 15%.


Practical tip

With this clarification, the modified Swiss lump-sum taxation is an attractive option for Norwegians considering a relocation to Switzerland. However, it is important to note that tax implications in Switzerland depend on the personal circumstances and vary across the cantons. Therefore, we recommend an analysis of the specific case, in order to determine the optimal tax strategy.


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