Swiss finance officials are stepping up talk of raising taxes on the rich foreigners who use the country and its lax residency requirements as a tax haven.
Foreigners can become residents after negotiating the amount of their income subject to taxation with the local canton (the country has 26) in which they intend to live. Foreigners with no local income pay according to their spending on rents or mortgages, with typical taxable income being about five times the accommodation rental paid.
The talk of changing the system has grown louder since 63-year-old French singer Johnny Hallyday's recent crossed the Alps to establish Swiss residency. Hallyday, according to Bloomberg News, is France’s answer to Elvis Presley and needs to spend at least six months a day each year in Bern to qualify for a tax break.
Just last week, a director of tourism confirmed that British singer James Blunt, who earned nearly $10 million from his debut album (which spawned the inescapable single, “You’re Beautiful”), had registered with the canton’s tax office. He will reportedly benefit from a deal similar to that struck by Hallyday.
At a meeting in Bern, finance ministers from each of the country's cantons agreed to pursue discussion on a possible revision of the existing tax system, which could more than double current taxation on 3,600 residents.
Bloomberg reported that under current legislation, foreigners with no income in Switzerland need to pay at least 75,000 francs in taxes on average, corresponding to an annual income of about 250,000 francs. Foreigners essentially pay a lump sum tax. Swiss passport holders can benefit from the same measure if they return after an absence of at least 10 years without working.
The finance ministers have not set a timetable for future discussions.
