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The “salmon migration” continues. Even Swiss tax experts are still baffled by the speed and scale of wealthy Norwegians fleeing the tax authorities to Switzerland since last fall. “I’ve never experienced anything like this before,” says KPMG’s Philipp Zünd, whose team looks after about twenty Norwegians. “The interest is so high that new candidates contact us almost weekly,” says Jürg Niederbacher, a partner at PwC.
Tax experts are watching: The second major Norwegian wave is forming right now. There is a real pulling effect, as “Handelzeitung” reported in February. Switzerland is considered “chic” – anyone with self-respect moves from the fjord country to the Alpine Republic. And for some newcomers, Switzerland has become even more attractive because the Norwegian tax administration has finally taken a clear position on modified flat rate taxation.
Due to the double taxation agreement, Norway could additionally tax those subject to flat rate taxation in Switzerland. It is now clear that Norwegians subject to flat-rate taxation reside in Switzerland, provided that all Norwegian income is declared on their Swiss tax return. Under the double taxation agreement, Norwegians subject to flat-rate taxation can partially recover Norwegian withholding tax.
However, many newcomers do not enjoy the privilege. Because now there are not only those who make their money work for themselves, but also, as expected, young entrepreneurs. Many want to relocate their company’s headquarters from here to work for the Norwegian holding company or set up a management company in Switzerland. It is too early to predict which sectors this will affect and how many jobs it will create. However, KPMG and PwC confirm that the number of inquiries has increased.
The fact that Norwegians want to work locally is a conflict of interest with the new and particularly attractive tax system approved by the Norwegian tax authorities. “They are not allowed to work under lump-sum taxation,” says KPMG tax expert Philipp Zünd. Even working from home is not allowed.
This leads to a trend that should have appealed to Switzerland: instead of working in Norwegian companies from here, managers were looking for new jobs in that country and entrepreneurs were starting entirely new companies. “Handelzeitung” reported in May that a company was founded in Lucerne. Another Norwegian is said to have bought a small hotel in Valais.
PwC’s Jürg Niederbacher observes that many people who come here want to work here too – sometimes for the same company as at home. Each case should be looked at individually. Whether flat taxation or regular taxation makes more sense for newcomers depends on general circumstances. But especially from the constituency.
“If someone moves to Wollerau with 20 million assets, they pay about 0.15 percent wealth tax there – that’s $30,000 a year. Then they might even have income and still be less than the lump-sum tax,” Niederbacher says.
Only in the very wealthy classes may it be beneficial for newcomers to stop working and opt for flat rate taxation. Tax experts expect this to be the case with assets of about 50 million francs.
This article was originally published on the paid service of handelszeitung.ch. Blick+ users have exclusive access as part of their subscription. You can find more exciting articles at www.handelszeitung.ch.
This article was originally published on the paid service of handelszeitung.ch. Blick+ users have exclusive access as part of their subscription. You can find more exciting articles at www.handelszeitung.ch.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
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