Swiss To Vote On Scrapping Expats Tax Breaks

Swiss To Vote On Scrapping Expats Tax Breaks

Wealthy business people, celebrities and sports stars may face paying more tax in Switzerland as the country goes to a referendum to vote on continuing their tax breaks.

Campaigners consisting of left-wing groups and unions have collected more than 100,000 names on a petition that forces the government to put the policy to public vote.

The protesters claim nearly 6,000 expats live in Switzerland and benefit from super low taxes, while the rest of the population have to pay at normal rates.

The named and shamed rich and famous include F1 star Michael Schumacher, singers Phil Collins, Shirley Bassey and Tina Turner and IKEA furniture store found Ingvar Kamprad.

Expats have the right to live but not work in Switzerland to maintain their tax breaks.

Opposition to the favouritism has already seen the tax benefits kicked out in three of Switzerland’s 26 cantons following public votes.

Equal rights

The government has also fought a battle against the opposing Social Democrats to scrap the rule.

As a sop to try to quell protests, the tax for wealthy expats is going up to seven times the annual rental value of homes from the current five times.

“The flat-rate tax hurts equal rights and undermines attitudes to taxation,” said one opposition group, the Alternative Left.

The tax was introduced in 1862 in a bid to help the tourist industry by encouraging wealthy pensioners to move to the country.

Meanwhile, the Swiss government is also under pressure from neighbours to reveal details of investments held by non-residents in the nation’s banks.

Windfall taxes

Germany and Austria are piling on the pressure to collect windfall taxes from banks, investment houses and insurance companies on assets that have lain in their vaults from as far back as the Second World War.

Britain has already agreed a tax pact with the Swiss to open previously secret bank records and for payments of tax expected to total at least £3 billion.

Austria’s deal looks set to start at the same time – while the German agreement is trapped in the country’s upper house of parliament.

A move for a referendum on the tax deals collapsed when campaigners failed to raise backing from the public.

The US is also imposing the Foreign Account Compliance Tax Act on Swiss financial institutions from January 2013.

The US and European nations have squeezed an agreement out of Switzerland by barring Swiss banks from borrowing on global money markets.

Swiss To Vote On Scrapping Expats Tax Breaks

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