Hollande’s Win Will Push Many Wealthy French Citizens to Switzerland
In Switzerland, they use a forfait system, a lump-sum cost for foreigners based on expenditure instead of income. At the end of 2010, France had 5,445 people in the forfait system, and over 33% of those are French. The forfait system calculates expenditure at not less than five times the annual rental value of the individual’s home in Switzerland. It is a desired system because it is simple.
Forfaits are causing some resentment in Swtizerland where top rates of income tax are above 40%. Swiss Parliament is currently debating a proposal to raise the forfait to seven times the rental value of a Swiss residence. In some cases, once these travelers become Swiss nationals, they will be paying as much if not more as they would have paid in France. One such case is Michel Lacoste; since he became a Swiss national, he pays more in taxes than he would have to pay in France.
See James Kraus, Swiss Bankers Plan for French Emigres as Hollande Wins, Bloomberg News Businessweek, May 22, 2012.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.