Swiss lump-sum taxation: who can use the expenditure tax

What this covers

Taxation according to expenditure (Besteuerung nach dem Aufwand, imposition d'après la dépense) is a Swiss method of assessing tax set out in Article 14 of the Federal Act on Direct Federal Tax (DBG) for the federal tax and Article 6 of the Tax Harmonisation Act (StHG) for cantonal and communal taxes. The tax base is the annual worldwide living costs of the taxpayer and the people they support, subject to minimum amounts and a control calculation. The tax is then computed at the ordinary rates.

Check the three federal conditions

Article 14(1) DBG gives natural persons the right to pay a tax based on expenditure instead of income tax if all three conditions below are met. Article 14(2) adds that spouses living together in an undivided marriage must both meet them.

The Federal Department of Finance says the right ends if the person acquires Swiss citizenship or takes up gainful activity in Switzerland. Managing one's own private assets is a separate question from gainful activity, so ask the canton how it draws that line.

• Not holding Swiss citizenship.
• Becoming subject to unlimited tax liability in Switzerland for the first time, or after an interruption of at least 10 years.
• Carrying on no gainful activity in Switzerland.

Work out the federal minimum tax base

Article 14(3) DBG says the tax is assessed on the annual living costs, incurred in Switzerland and abroad during the assessment period, of the taxpayer and the people they support. The base must be at least the highest of the amounts in the table.

The fixed amount is indexed. The text in force on 2 September 2026 shows CHF 435,000, in the version set by a Federal Department of Finance ordinance on cold progression in force since 1 January 2026. Article 14(6) says the department adjusts that amount to the consumer price index. Check the current text for the year in question.

The tax is then calculated at the ordinary federal rates under Article 36 DBG. Article 14(4) excludes the reduction in Article 36(2bis), second sentence.

Run the control calculation

The control calculation stops the expenditure base from falling below what ordinary tax would be on certain income. Under Article 14(3)(d) DBG, the base must also be at least the sum of the gross income from these sources.

Article 14(5) adds a rule for treaties. Where a country gives relief from its own tax only if Switzerland taxes the income at the rate for total income, the tax is measured on all income from that source country that the treaty allocates to Switzerland, not only on the items listed below.

For cantonal tax, Article 6(6) StHG uses a similar test but with income and wealth together: the expenditure tax must be at least the ordinary income and wealth tax on the gross amount of Swiss property, Swiss movable assets and capital, rights used in Switzerland, Swiss pensions and treaty-relief income, and the income from them.

• Income from immovable property in Switzerland.
• Income from movable property located in Switzerland.
• Income from movable capital invested in Switzerland, including claims secured by Swiss real estate.
• Income from copyrights, patents and similar rights used in Switzerland.
• Retirement benefits, annuities and pensions from Swiss sources.
• Income for which the taxpayer claims full or partial relief from foreign taxes under a Swiss tax treaty.

Check whether your canton offers it

Cantons are not required to offer the method. Article 6(1) StHG says a canton may grant the right to pay an expenditure tax instead of income and wealth tax, on the same three conditions as the federal law. Each canton sets its own minimum amount, and Article 6(5) says each canton decides how the expenditure tax covers wealth tax.

The Swiss Federal Tax Administration's 2026 edition of Geltende Steuern says the method is available in most cantons. It says the cantons of Zurich, Basel-Stadt, Schaffhausen and Appenzell Ausserrhoden abolished it, and that in Basel-Landschaft it is now possible only in the year of arrival and only until the end of the current tax period. The Federal Department of Finance page, published in 2024, says Zurich abolished it after a 2009 popular vote, effective from January 2010.

Because the canton sets the minimum and the wealth rules, the federal figures are only part of the picture. Ask the cantonal tax administration for its current rules and minimum.

Know how the claim is made and how rules changed

The ESTV says a person who claims taxation according to expenditure must file the tax return provided for it and prove that they meet the conditions. It describes the tax as generally based on the annual expenses of the taxpayer and their family, and says it may not be lower than ordinary tax on the Swiss-source items and treaty-relief income.

The current federal rules came from a law of 28 September 2012, in force for the federal tax since 1 January 2016. Article 205d DBG kept the old Article 14 for five years for people already taxed on expenditure when the change took effect. That transition has now run its course.

The Federal Department of Finance says fewer than one in a thousand Swiss taxpayers are taxed this way.

Remember that residence rules come first

The method applies to people with unlimited tax liability in Switzerland, which under Article 3 DBG arises from a tax domicile or a tax stay. The Switzerland country page sets out the 30-day and 90-day tax stay tests and the domicile test.

Expenditure taxation in Switzerland does not decide what another country taxes. A former home country may still treat you as resident, and US citizens stay within US tax wherever they live. Some treaty partners give relief only on conditions, which is why Article 14(5) exists. See leaving a country for tax, special tax regimes for new residents and the lump-sum taxation entry.

Common misconceptions

Questions to take to a professional

1. Do I meet all three federal conditions, including at least 10 years without unlimited tax liability in Switzerland?
2. Does my spouse also meet the conditions?
3. Does any activity I plan, including managing a company or board roles, count as gainful activity in Switzerland?
4. Does my chosen canton offer the method, and what is its minimum amount and wealth tax rule?
5. How would the control calculation apply to my Swiss property, Swiss investments, Swiss pensions and treaty-relief income?
6. Which of my source countries give treaty relief only if Switzerland taxes the income at the rate for total income?

Questions people ask

Sources

• Bundesgesetz über die direkte Bundessteuer (DBG), SR 642.11, Art. 14 and Art. 205d (Stand 2 September 2026)Primary law
• Bundesgesetz über die Harmonisierung der direkten Steuern der Kantone und Gemeinden (StHG), SR 642.14, Art. 6 (Stand 1 January 2025)Primary law
• Geltende Steuern (Stand der Gesetzgebung: 1. Januar 2026), ESTV Dossier Steuerinformationen, section 3.1.2.2Official guidance
• Besteuerung nach dem Aufwand (Federal Department of Finance)Official guidance