Switzerland Lures Rich Expats
Rock stars, movie people and super-rich folks from all over the world are choosing Switzerland as a place to live. They number about 3,700, enough to populate a small town. The reason is simple - taxes.
French rock star Johnny Hallyday, who noted in a New York Times article that his tax bill would be 70% of his earnings in France, has decamped for Gstaad. The list of expatriates in Switzerland includes Ikea founder Ingvar Kamprad, racing champ Michael Schumacher, cyclist Jan Ullrich, singers David Bowie, Phil Collins, Celine Dion, and Tina Turner, and actor Roger Moore.
Switzerland’s appeal derives from the fact that each of its 26 cantons writes its own tax code, and there’s nothing to stop these cantons from negotiating with expats on a one-by-one basis. The canton usually asks for a one-time tax payment based on the value of the expat’s Swiss home in exchange for tax immunity from then on. There’s no scarcity of attorneys and other advisers who stand ready to help wealthy expats score a deal.
Some Swiss are in favor of this type of arrangement, which brings in revenues at a time when Swiss corporate and personal taxes have been slashed. Others have cried foul, however, saying that it is not fair to ordinary Swiss citizens and to the countries these expats have left behind. But if the expat tax perks were abolished, the super-rich would simply go somewhere else where taxes are less punitive than in their home countries, somewhere like Belgium.