Expenditure-based taxation, also called lump-sum taxation or, in French, the forfait fiscal, lets a wealthy foreigner who carries on no gainful activity in Switzerland be taxed on what living there costs, instead of on actual income and wealth. It is available in Geneva and Vaud, it is set by a ruling with the cantonal administration, and in 2026 it rests on minimum bases that run from 415'000 CHF in Vaud to 468'993 CHF in Geneva with its surcharge. Three things surprise people who read only the headline: a control calculation that can push the tax above the base, a Geneva inheritance consequence, and an unresolved question under the Italy-Switzerland convention. This page deals with each of them.
What expenditure-based taxation is, and what it is not
Under ordinary taxation you declare your income and your wealth and the canton taxes them on the ordinary scale. Under expenditure-based taxation you do not declare them in the same way. The administration instead takes a base that represents your expenditure, and the ordinary scale is applied to that base. The base is fixed in a ruling with the cantonal tax administration, before or at the start of your Swiss residence, and the ruling is the document the whole arrangement rests on.
Two misunderstandings are worth clearing up at the outset. It is a method of assessment, not an exemption: you pay Swiss income and wealth tax, calculated differently. And it is not a flat fee that you negotiate freely. The law sets minimum bases, a rent-multiple rule and a mandatory comparison with ordinary taxation. What the ruling settles is where your file lands within those rules, which is a real conversation but not a bargain struck from nothing.
The regime also has a cost of entry in flexibility. The personal and social deductions of ordinary taxation are not available, and someone who gives up expenditure-based taxation cannot, in principle, come back to it. We always set that second point beside the first-year comparison, because the decision is easier to reverse in one direction than in the other.
Who qualifies
The federal conditions, set by article 14 of the federal direct tax law and detailed in circular no. 44 of the Federal Tax Administration, are three. You must not hold Swiss nationality, and dual nationals are included in that exclusion. You must be taking up tax residence in Switzerland for the first time, or returning after an absence of at least ten years. And you must carry on no gainful activity in Switzerland. If you are married, both spouses must meet these conditions.
What "no gainful activity in Switzerland" rules out
The federal wording is broad: a main or secondary occupation of any kind. The circular names artists, scientists, inventors and sportspeople as examples, which tells you that the test is not limited to employment or to a registered business. Running your own company from Geneva or Lausanne is a gainful activity and is incompatible with the regime. For board members, the circular targets only those who personally exercise a gainful activity in Switzerland, so a seat on a board does not by itself disqualify you; what you do for the company does.
Managing your own private wealth is treated differently from carrying on a business. Collecting your rents, looking after your portfolio and instructing your bankers is not, as such, what the rule has in mind. Where the line is drawn in practice, once the portfolio is large, the structures are several and the family is involved, is a matter for the ruling and for the facts of your file, not for a web page. If you hold or run an operating company, the route is ordinary taxation, and we cover it in our page on transferring a company or holding to Switzerland. A residence permit is a separate step with its own conditions, set out on the residence permit page.
How the base is computed
The base cannot be lower than the highest of several measures. The first is the minimum base set by law, federal and cantonal. The second is a multiple of your housing cost: seven times the annual rent, or seven times the rental value if you own the home you live in. Where you are lodged and boarded, for example in a hotel or a pension, the multiple is three times the board price. The third is the control calculation, described below. Your own household expenditure, as the administration assesses it, is the starting point, and these measures are the floors beneath it.
For federal tax purposes the minimum expenditure base has moved as follows.
| Year | Federal minimum expenditure |
|---|---|
| 2023 | 421'700 CHF |
| 2024 | 429'100 CHF |
| 2025 | 434'700 CHF |
| 2026 | 435'500 CHF |
| 2027 | 437'000 CHF |
The federal minimum for 2026 is 435'500 CHF, and for 2027 it is 437'000 CHF, according to the Federal Tax Administration's circular letter of 20 October 2026. You may see 435'000 CHF on a cantonal table; the federal figure is 435'500 CHF.
The minimum is only one input. Because the multiple of your housing cost applies as well, a villa or a lakeside apartment with a high rental value can set a base well above any minimum on this page. Housing is therefore the first number we ask for, ahead of anything in your accounts.
The cantonal minima, which are what actually bind
The federal figure applies to federal direct tax. For the cantonal and communal taxes, which are the larger part of what you pay in Geneva or Vaud, the cantonal minimum is the one that binds, and it is higher or lower than the federal figure depending on the canton.
| Canton | Minimum base | Other points |
|---|---|---|
| Geneva | 426'357 CHF for 2026 (cantonal base of 400'000 CHF, indexed); 468'993 CHF with the 10% surcharge shown on the cantonal table | Covers income and wealth; seven times rent or rental value; ordinary scale; control calculation; modified global taxation procedure |
| Vaud | 415'000 CHF, with the 15% wealth surcharge included | Seven times rent plus 10%; three times board plus 10%; ordinary scale; control calculation |
| Ticino | 434'700 CHF, indexed, from the 2025 period | Seven times rent; wealth deemed to be five times the expenditure base |
These are minimum expenditure bases, not tax amounts. The tax is what the ordinary scale produces on the base, with the cantonal and communal additions, and it depends on the canton and on your file. We publish no tax figure for any taxpayer, because any such figure would be a guess presented as a quote. Two cautions apply to the table. The Vaud indexation is something we confirm at the time of a file rather than state here. And a 12% reduction was voted in Vaud on 27 September 2026, so Vaud figures, on this page or anywhere else, should be read with that vote in mind.
Several cantons have abolished expenditure-based taxation: Zurich on 1 January 2010, then Schaffhausen, Appenzell Outer Rhodes, Basel-Landschaft and Basel-Stadt. If you are comparing the two cantons on which we work, our page on Geneva versus Vaud sets out the other differences, from housing to inheritance.
The control calculation nobody mentions first
Brochures describe the regime as a simple base multiplied by a scale. The law adds a safeguard in the administration's favour: the tax assessed on the expenditure base may not be lower than the tax that ordinary taxation would produce on your Swiss-source income and on the income for which treaty relief is requested. That is the control calculation, and it is mandatory in the federal tax and in both Geneva and Vaud.
The consequence is that the expenditure base is a floor, not a ceiling. The administration compares two numbers and takes the higher. If you hold nothing in Switzerland beyond your home, the comparison usually confirms the base. If you hold Swiss real estate that produces rent, or Swiss securities that pay dividends, the ordinary tax on that income can exceed what the base alone would produce, and you then pay the higher amount. The regime does not make Swiss-source income cheaper; it only stops the rest of your worldwide position from being taxed in the ordinary way.
That matters for how you plan. The location of your assets, Swiss or foreign, becomes a variable in the decision. We therefore list your Swiss holdings before recommending the regime, and we run the comparison on them, rather than relying on the headline minimum.
The treaty question, handled with care
The Italy-Switzerland convention of 1976, in force since 1979, contains a rule on residence at article 4, paragraph 5, letter b. It provides that an individual is not considered a resident of a state if he or she is not subject there to the taxes generally levied on all income that is generally taxable under that state's law and that arises in the other state. That wording was written with regimes of this kind in mind, and it is why the question comes up for anyone leaving Italy for Switzerland on an expenditure basis.
The mechanism Swiss law provides is modified global taxation. The items of income for which treaty relief is requested are brought into the expenditure base and taxed under the ordinary scale. Italy is among the states concerned by that procedure, as the Federal Tax Administration's circular and its forms show, and Geneva's law provides for the procedure expressly.
We draw no conclusion in either direction on how that rule operates for a particular taxpayer, because the sources do not support one. No official Italian or Swiss source that we have found documents how the Italian authorities treat a Swiss expenditure-based resident in practice. A page that tells you the answer is yes, or that it is no, is telling you more than anyone has published. What we do is identify which of your items of income would fall within the procedure, what bringing them into the base would cost, and which questions deserve a written position before you move.
One further fact is useful, and it is settled. Switzerland left the Italian black list of individuals' tax havens in 2023, with effect from 2024, which moved the burden of proving residence onto the Italian tax administration. It does not answer the treaty question, but it affects who has to prove what in a residence dispute.
Geneva's inheritance consequence, which changes the arithmetic
In Geneva, the surviving spouse and relatives in the direct line are exempt from inheritance duty. The exemption does not apply if, under one of the last three final assessments before death, the deceased was taxed on expenditure. The heirs then fall under the first-category tariff. For children, parents and spouses that tariff starts at 2% above 5'001 CHF and rises by brackets to 6% above 500'000 CHF. Grandchildren and grandparents pay a 20% surcharge on the tariff, which brings the highest rate to 7.2%, and other descendants and ascendants a 30% surcharge. No additional centimes are levied for this category, and each heir has a base allowance of 5'000 CHF. The same exception applies to gifts.
This is not a hidden trap, because it is in the law and you can price it. It is an arbitrage: the annual saving that expenditure-based taxation may produce on one side, and the duty your heirs may bear at the end of the period on the other. Over a long horizon, with a large estate and children as heirs, the second can outweigh the first; over a shorter one, or with a modest estate, it may not. Because the test looks back over the last three final assessments, the exposure also depends on when the regime ends, which is one reason the choice is not one-way.
Vaud's inheritance law contains no equivalent exception for taxpayers assessed on expenditure. It does tax descendants, with a deduction per hereditary stock, and it reduces the duty on a foreigner's estate by half under conditions, one of which is that the person has never exercised a gainful activity in Switzerland. Whether that reduction is open to an Italian taxpayer assessed on expenditure is a question to examine with the canton, not a given. There is no inheritance convention between Italy and Switzerland, so the question of which state taxes what has to be answered estate by estate.
What expenditure-based taxation does not solve
It is a Swiss regime. It decides how Switzerland assesses you once you are resident there, and it changes nothing about the Italian exit tax. That tax remains a bill that is not yet law, and its terms may change before any vote. Our page on the Italian exit tax sets out what the text provides and what it leaves open, and the page on deferral of payment for a move to Switzerland explains why that point is open and not settled in your favour. To see the order of magnitude on your own assets, use the exit tax calculator.
Ark Fiduciaire prepares and negotiates the ruling in Geneva and Vaud, with the tax lawyers of PBM Avocats where the file requires it. Before you choose, we quantify the regime against ordinary taxation on your actual figures: your housing plans, your Swiss assets, your family and your likely heirs, with the control calculation and the Geneva inheritance exception included in the comparison. The analysis is done on documents. If expenditure-based taxation turns out to be the wrong tool for your situation, the same analysis tells you so.