In recent months, many Norwegian families have moved to Switzerland. One of the reasons for this development is the tax hike implemented by the current Norwegian government that particularly affects wealthy entrepreneurs. There are different aspects that make Switzerland attractive in this context.
In recent months, many Norwegian families have moved to Switzerland. One of the reasons for this development is the tax hike implemented by the current Norwegian government that particularly affects wealthy entrepreneurs. Due to the increased number of departures, the regulations governing the Norwegian exit tax have been tightened.
Unrealized capital gains on securities or participations in legal entities are subject to capital gains tax of currently 37.84% (so-called "exit tax") when the shareholder leaves Norway. In the case of a departure before October 2022, the tax rate was 35.2%. The exit tax is calculated at the time of the departure and is generally due at this time. However, it can be deferred as long as the shareholder does not sell the shares and provides sufficient security for the tax due since Switzerland is not part of the European Economic Area.
Under the previously applicable rules, this "deferred" exit tax expired five years after the departure unless the shares had been sold. Since October 2022, however, the exit tax obligation remains indefinite, and the shareholder must pay Norwegian capital gains tax of currently 37.84% upon the sale of the shares.
Further tightening in on the horizon
Currently, there are efforts in Norway to abolish the deferral of the exit tax, so that it could become immediately due and payable upon departure or payable in instalments. It is important to monitor any developments in this regard. It is likely, however, that there will be a further exodus of Norwegian entrepreneurs and their families as a result of this.
Tax aspects of moving to Switzerland
When leaving Norway, careful planning is required, especially with regard to the termination of unlimited tax liability in Norway and the exit tax provisions mentioned above. This includes, on the one hand, compliance with unilateral Norwegian regulations and, on the other hand, various aspects relating to the double taxation agreement between Switzerland and Norway. Only if these regulations are observed will a move be effective from a tax point of view.
Taxation in Switzerland
Individuals subject to taxation in Switzerland are generally taxed based on their worldwide income and assets. Under certain conditions, foreign nationals may benefit from the attractive lump-sum taxation.
However, persons moving from Norway to Switzerland should generally forego the lump sum taxation for the first few years due to the interpretation by Norwegian tax authorities of a provision in the double tax agreement between Switzerland and Norway. Therefore, before moving to Switzerland, it should be checked whether a (later) lump-sum taxation is possible or which taxation is most beneficial considering various aspects (asset and income situation, tax planning possibilities, etc.).