• Rinaldo Neff, Director |
  • Philipp Zünd, Partner |

In principle, a tax ruling offers protection of legitimate expectations. However, if the legal basis changes, as in the present case, this protection of legitimate expectations is lost, and the rulings lose their validity.


In international tax competition, Swiss lump-sum taxation is an attractive tax model for attracting wealthy individuals. In order to claim lump-sum taxation, a person must not have Swiss citizenship, must be resident in Switzerland for the first time or after the lapse of at least 10 years and must not be gainfully employed in Switzerland. In principle, the tax burden is determined based on the cost of living, but at least according to the highest of the following amounts1:

a) CHF 400,000;
b) seven times the annual rent (or rental value in the case of residential property).

With the circular on the compensation of the cold progression in the direct federal tax of 21 September 2022, the aforementioned minimum lump-sum will be raised from CHF 400,000 to CHF 421,700 as of 1 January 2023. At the same time, however, the tax rate will be reduced, which is why the effective tax burden will increase only minimally.

Impact on tax rulings and cantonal practices

In this context, the question arises as to how this change will affect existing tax rulings and the minimum flat rates published by the cantonal tax authorities.

In principle, an approved tax ruling establishes a protection of legitimate expectations, i.e. the person concerned can legally rely on the approved facts. However, the protection of legitimate expectations ceases to apply if, for example, the relevant legal provisions change, or the courts decide to adjust the administrative practice. In such cases, the tax ruling generally loses its binding effect and does not have to be explicitly revoked by the competent authority. 

In the specific case, this would mean that all tax rulings in which a minimum flat rate of CHF 400,000 was agreed, lose their validity in this respect and a minimum flat rate of CHF 421,700 will apply from 1 January 2023. The extent to which the cantons will take advantage of this opportunity and also want to adjust the flat rate for cantonal and communal tax agreed in the corresponding ruling cannot be estimated at present.

According to our investigations, the cantons are for the most part not seeking to change their practice with regard to the minimum flat rate. In most cantons, the minimum lump-sums for cantonal and communal tax purposes are higher than CHF 400,000 and CHF 421,700 respectively, as at the level of direct federal tax, which is why there is probably no concrete need for action here per se. Developments in this context remain to be seen.

Nevertheless, it is advisable to review the tax rulings affected by the above change and, if necessary, contact the relevant cantonal tax authorities.

1For the sake of completeness, it should be mentioned that any pension price paid (accommodation and meals) as well as a corresponding control statement with income and assets from Switzerland must also be taken into account.

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