Lump-sum tax

A lump-sum tax is a special way of taxation, based on a fixed amount, rather than on the real circumstance of the taxed entity.[1]

If the lump-sum tax is the same for all taxpayers, it is a poll tax.[1]

Description

It is one of the various modes used for taxation: income, things owned (property taxes), money spent (sales taxes), miscellaneous (excise taxes), etc. It is a regressive tax, such that the lower the income is, the higher the percentage of income applicable to the tax.

Switzerland
See also: Taxation in Switzerland, Tax exile, and Tax haven

Rich foreign nationals resident in Switzerland can be taxed on a lump-sum basis if they do not work in the country.[2] This taxation is based on estimated living expenses, rather than on real income and assets.[2]

Seen as unfair, lump-sum taxation has been abolished in several cantons.[2] However, a national abolition was rejected by referendum in 2014. At the end of 2016, 5,000 people were subject to lump-sum taxation in Switzerland.[2]

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See also

Notes and references
  1. "Lump sum tax", Oxford Reference, Oxford University Press (page visited on 6 November 2018).
  2. Lump-sum taxation, fact sheet of the Federal Department of Finance, November 2017 (page visited on 6 November 2018).
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