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Swiss voters could decide to reduce some tax breaks for foreigners

October 20, 2012

Americans are, as they should be, focusing on the presidential election that's just over two weeks away.

The winner of the White House could determine what income tax rates we'll pay.

But some wealthy Americans who might consider moving based on the Nov. 6 election results also should keep an eye on the electorate in Switzerland.

That Alpine nation, long known as a tax haven for the wealthy from the United States and Europe, might be making tax changes that could lessen its appeal to foreign expatriates.

Passport stamps by hjl via Flickr Creative Commons
 Passport stamps by hjl via Flickr Creative Commons

Swiss residents who say they've had "enough with tax privileges for millionaires," reportedly have collected the 100,000 signatures required to put a proposal to end some tax breaks to a national vote.

Domestic efforts to limit tax breaks: Last year, the Internal Revenue Service was successful in putting a stop to the hiding of taxable income by thousands of U.S. residents in offshore accounts.

The tax victory was thanks to a whistleblower who played a role in the tax-avoidance schemes at the Swiss national bank UBS (and was handsomely rewarded for his insider tax cheat info) and the IRS' follow-up offshore voluntary disclosure initiatives, unofficially referred to as tax amnesties.

Some members of Congress also have introduced bills, prompted by a Facebook co-founder's move to Singapore, that could cost U.S. citizens if they choose to move to another country in order to pay lower taxes.

None of those measures has so far advanced in the current Congress, which will wrap up its business at the end of the year.

Swiss tax break targets, too: But tax disincentives are now being threatened from Switzerland, a popular destination for many seeking to escape high taxes in their home countries.


At issue in the possible Swiss referendum is a system in which rich expatriates get tax
deals based on the rental value of their property rather than their
actual income or wealth as long as they don't work in the country.

More than 5,000 wealthy foreigners have taken advantage of the system, say the tax break opponents, including Formula One driver Michael Schumacher, pop music star Phil Collins, American songstress Tina Turner and IKEA founder Ingvar
Kamprad.


Despite growing opposition from the Swiss citizenry to tax breaks for foreigners, the Swiss parliament last month rejected a proposal by some of its members to eliminate the favorable tax treatment of its wealthy newer residents.

But the national referendum might just take care of that.

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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