The Ticino lump-sum regime, explained without spin.

What the forfait really is

So-called expenditure-based taxation (art. 14 LIFD and art. 13 LT) replaces, for foreign individuals with no gainful activity in Switzerland, the ordinary income- and wealth-based calculation with a lump-sum taxable base, computed on the worldwide standard of living of the taxpayer and their family.

It is not an opaque regime. It is a statutory institute, with minimum taxable base thresholds, subject to a binding ruling that puts the figures in writing before the permit file is even submitted.

Income, taxable base, tax: three different things

Almost every misunderstanding about the forfait comes from mixing up income, taxable base and tax. Before looking at the figures, it is worth pinning the three concepts down — they are distinct in the ordinary regime too.

1. Ordinary taxation — how it works for anyone

A "classic" Swiss resident declares each year their worldwide income (salaries, dividends, interest, rents, pensions...) and their worldwide wealth (real estate, accounts, holdings, policies...). On those actual figures the authority computes:

• a taxable base on income (income net of statutory deductions);
• a taxable base on wealth (net patrimony);
• the tax due, by applying progressive rates: federal (LIFD), cantonal (TI) and communal (your municipality).

For higher incomes in Ticino, the combined effective burden (federal + cantonal + communal) typically exceeds 35-40% of income, with wealth tax on top (broadly 0.2-0.35% of net wealth, depending on the municipality).

2. Expenditure-based taxation (forfait) — the alternative

The forfait, reserved for foreign nationals with no gainful activity in Switzerland (art. 14 LIFD and art. 13 LT), does not look at actual worldwide income. It replaces worldwide income and wealth with a deemed taxable base computed on the family's annual expenditure. Ordinary federal, cantonal and communal rates are then applied on top — exactly as for a normal resident, but on a negotiated number.

The taxable base is set at the highest of these parameters:

• statutory cantonal minimum (Ticino, tax year 2026: CHF 435,000 for EU/EFTA citizens — federal LIFD minimum is aligned);
• 7× annual rent (or imputed rental value) of the taxpayer's main home;
• 3× annual pension for board and lodging, for those staying in a hotel or as a guest;
• sum of documented worldwide expenditure of the family (travel, staff, cars, schools, jet, yacht, secondary residences...).

On top of that, a minimum taxable wealth equal to 5× the taxable base on income applies (Ticino 2026: minimum CHF 2,175,000).

2-bis. Why is it called "lump-sum" if the tax rises with the base?

Fair question — the name is the source of the confusion. The "lump sum" is not the tax: it is the taxable base. "Lump-sum" (or "forfait") means the base is a conventional figure, negotiated once with the Canton in the upfront ruling and decoupled from actual worldwide income and wealth. Ordinary progressive rates are then applied on that base — just like for any other resident.

The advantage is not a lower rate: it is that a taxpayer with, say, CHF 20 million of actual worldwide income is taxed on a base of CHF 1-2 million instead of on the 20. Once set, the base — and therefore the annual tax — remains stable and predictable for the entire duration of the regime, regardless of how much income or wealth grows abroad. It is "flat" relative to actual income, not relative to the agreed base.

The base only moves if the relevant lifestyle in Switzerland changes structurally (e.g. moving to a villa with a much higher rent, which triggers the 7× rent rule). As long as the agreed situation holds, the number in the ruling is what is paid — year after year.

3. The actual floor — Lugano, 2026

Starting from the Ticino statutory minimum (base CHF 435,000 + wealth CHF 2,175,000), the minimum total annual tax (federal + cantonal + communal) in Lugano lands indicatively at:

• ~CHF 148,000 for a married couple;
• ~CHF 152,000 for a single taxpayer.

That is the floor: regardless of patrimony or worldwide income, a forfait taxpayer in Lugano does not pay less. Other municipalities in the Luganese (Collina d'Oro, Paradiso, Montagnola, Castagnola) have historically lighter communal multipliers.

4. When expenditure pushes the base — and the tax — up

The forfait is not a flat CHF 148,000 fee for life. Above the statutory floor, ordinary progressive rates (federal, cantonal Ticino, communal Lugano) apply on the agreed base. For reference, ordinary 2026 taxation in Lugano (married, 80% communal multiplier) produces the following indicative total burdens (federal + cantonal + communal, income only):

• Taxable income CHF 200,000 → total tax ~CHF 46,700 (effective ~23.4%);
• Taxable income CHF 400,000 → total tax ~CHF 124,600 (effective ~31.1%);
• Above ~CHF 500,000 the combined marginal rate converges to ~40%, a ceiling that stays broadly flat for much higher incomes.

Applied to the forfait — where the "base" is the deemed taxable income and the minimum wealth (5× base, indicative effective rate ~0.4-0.45%) is always added — total annual burden in Lugano lands approximately as follows (married, indicative):

• Base CHF 435,000 (statutory minimum, wealth CHF 2,175,000) → ~CHF 148,000/year;
• Base CHF 1,000,000 (wealth CHF 5,000,000) → ~CHF 380,000-410,000/year;
• Base CHF 2,100,000 — e.g. villa leased in Collina d'Oro at CHF 25,000/month, 7× rent (wealth CHF 10,500,000) → ~CHF 820,000-880,000/year;
• Base CHF 5,000,000 — worldwide expenditure of a family with jet, yacht, staff, international schools (wealth CHF 25,000,000) → ~CHF 2,000,000-2,100,000/year.

5. Three worked examples — ordinary vs forfait

To make the difference concrete, here are three profiles of a foreign national without gainful activity in Switzerland applying for residency in Lugano. For each we show what they would pay under ordinary taxation (actual worldwide income and wealth) and what they would pay, indicatively, under the forfait at the Ticino 2026 statutory minimum. Single, Lugano communal multiplier 80%, no special deductions, no church tax.

* For a CHF 1 billion estate the theoretical floor (~CHF 152,000) is not realistic: the tax authority looks at the home (7× rent), staff, security, jet, yacht, travel, schools. A credible range to negotiate in the ruling is CHF 0.5-2 million/year — still one or two orders of magnitude below the ~CHF 35-40 million of ordinary taxation.

The read is simple: below a certain worldwide income level (broadly 500-600k), the forfait is not worth it — ordinary costs less. Above that, the differential becomes structural and grows quickly with real income, while the Swiss tax stays anchored to the agreed base.

That is why we do not "sell" the forfait by default: for each profile, before relocation, we reconstruct both scenarios in writing. The promise is not a minimum rate — it is predictability: knowing in advance, in francs, what it will cost to live in Switzerland each year.

Figures are indicative and rounded to order of magnitude: the curve converges quickly to an average effective rate around 38-40% of the deemed taxable income (plus ~0.4% on minimum wealth). For taxpayers whose actual worldwide income materially exceeds the agreed base, the absolute amount remains substantially lower than ordinary taxation — which is precisely the economic rationale of the regime.

Indicative 2026 figures, Municipality of Lugano, married, communal multiplier 80%. Actual numbers are fixed in writing through the upfront ruling with the Cantonal Tax Authority before relocation.

Who should not choose it

The forfait is not always the right choice. For individuals with modest worldwide income relative to lifestyle, ordinary taxation may be lighter. For anyone planning to run a Swiss business, it is simply incompatible.

Good advice starts by asking whether you actually need it — not by selling it to you by default.

The file to prepare

A solid ruling requires: evidence of recent worldwide lifestyle, lease or purchase undertaking in the chosen municipality, family structure, declaration of no gainful activity in Switzerland, and a high-level patrimonial overview. Nothing more, nothing less.

Timing and sequence

Typical approach: 1) confidential meeting in the Luganese; 2) ruling drafted with a specialised cantonal tax counsel; 3) ruling filed with the Cantonal Tax Authority; 4) B-permit application filed in parallel; 5) actual transfer of residence. End to end, an orderly file takes on average 3-6 months.

Foreign withholding tax reclaim

A frequently overlooked chapter: investors holding portfolios with foreign dividends and coupons leave significant amounts of unrecovered withholding tax on the table every year, especially on US and EU securities. Through our exclusive contacts with specialised local firms in withholding-tax reclaim, we can have the portfolio of the past tax years reviewed and the recovery procedures activated with foreign tax administrations — a service that, on meaningful patrimonies, self-finances comfortably within the first cycle.

Legal references

• Art. 14 LIFD — Swiss Federal Act on Direct Federal Tax, expenditure-based taxation.
• Art. 13 LT — Cantonal Tax Act of the Canton of Ticino of 21 June 1994 (in force 1 January 2026), including the amendment setting minimum taxable wealth at five times the taxable income base.
• Cantonal Government Decree of 19 November 2025 on the taxation of individuals for fiscal year 2026.
• FTA Circular no. 44 of 24 July 2018 — Swiss Federal Tax Administration, expenditure-based taxation of individuals.
• Reference technical papers: Canton Ticino Tax Guide 2026 — AccountEX; official tax calculators of the Cantonal Tax Authority (www4.ti.ch).

Specific figures (minimum thresholds, communal multipliers, tax rates) are updated yearly. Every mandate includes a verification of the versions in force at the date of the ruling.

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