The Swiss Tax Authority published a new summary of the legislation and practice of the existing lump-sum tax legislation. Moreover, the SFTA (Swiss Federal Tax Administration) provided further guidance to various aspects, which were not wholly handled until now consistently. The SFTA's circular explains in depth the applicable rules also to the new and stricter legislation for those tax residents who entered the tax regime after January 2016. Those tax residents, who chose the lump sum tax before 2016, have time to comply with the new laws until 1 December 2020. The famous Swiss lump-sum taxation is one of the most beneficial tax optimization for those taxpayers, who are not Swiss citizens, do not have an unlimited tax liability in the country and don't perform any commercial activity in Switzerland. In the case of married couples, both spouses must qualify for the requirements. The prohibition of any commercial activity means any employed or self-employed business, and until now it was a severe concern for athletes, artists, scientists and investors. Soon it became clear, that in such difficult personal financial circumstances, the cantonal tax authorities must analyse the situation on a case-by-case basis. The amount of the lump sum tax is tied to the annual living costs. Since 2016 the amount of tax is equal to equal to at least seven times the annual rental value of the taxpayer's home. Regarding this amount the circular now clarified what would happen if the taxpayer uses various properties in Switzerland. In these cases, the amount of the lump-sum tax will be calculated on the multiple bases, even if the additional property is not a primary residence of the taxpayer. This issue is an essential detail for those residents who also own or rent a more expensive, (for example vacation home) real estate in Switzerland than the property, where they ordinary live. The gross income of the taxpayer, which must be declared in the yearly control calculation also includes the foreign sourced income (as dividends, royalties and interests) and all other amounts the taxpayer wants to claim for exemption of foreign withholding taxes. Moreover, the necessary control calculation must include all income from local Swiss sources (for example Swiss properties and other assets invested or located in Switzerland, and it consists of the financial assets as well).

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