also called forfait · flat-fee tax regime
A regime, notably in Switzerland and Italy, where certain wealthy foreign residents pay a fixed annual amount instead of tax on actual worldwide income.
Lump-sum taxation lets certain wealthy newcomers, notably in Switzerland and Italy, pay a fixed yearly sum instead of tax on what they actually earn worldwide. It resembles a flat tax but is not the same: a flat tax is one rate on real income, while this is a set amount agreed regardless of your true earnings. Who qualifies and how much it costs is worked out case by case, not printed on a menu.
You have a large, globally spread income and consider moving to a Swiss canton under this regime. Rather than declaring every stream, you agree an annual figure with the authorities, but the amount, and whether you even qualify, depend on a private negotiation, not a rate anyone can quote you upfront.
For high earners it can cap total tax, but eligibility and the fixed amount vary and it's negotiated, not automatic.
The difference is the whole point, so here is each one in a line.
These are the favourable schemes some countries offer people who move in.
Non-dom status treats a resident whose permanent home is elsewhere kindly on foreign income, Portugal's Non-Habitual Resident and Spain's Beckham Law are time-limited versions of that idea, and lump-sum taxation in Switzerland and Italy lets certain wealthy residents pay a fixed annual amount instead of tax on actual worldwide income.
A flat tax is the broader idea of one fixed rate regardless of how much you earn.
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