🇨🇭 COUNTRY A Switzerland VS 🇦🇹 COUNTRY B Austria

Switzerland's income tax has three layers: federal tax (direct federal tax — Direkte Bundessteuer), cantonal tax (Kantonssteuer), and communal tax (Gemeindesteuer — usually a multiplier of the cantonal rate). Federal tax is the same across all cantons (maximum 11.5% on employment income). Cantonal and communal rates vary dramatically. 2026 verified combined effective rates at CHF 200,000 income (federal + cantonal + communal, per the ESTV official calculator): Zug: ~11.5%. Zurich: ~19.5%. Other low-tax cantons such as Schwyz, Nidwalden, Uri, and Obwalden are also highly competitive, while Geneva, Vaud, Basel-Stadt, and Bern are considerably higher. Canton shopping: individuals can genuinely reduce their Swiss tax burden by choosing to live in Zug rather than a high-tax canton — a difference that can exceed 30 percentage points versus Switzerland's most expensive cantons. Zug has attracted numerous companies and wealthy individuals precisely for this reason. For a CHF 500,000 income earner: Zug's effective rate is only ~17.5% (CHF 87,380 total) — dramatically below high-tax cantons, saving well over CHF 100,000/year in income tax versus Switzerland's most expensive cantons.

Swiss lump-sum taxation (Pauschalbesteuerung, or forfait fiscal / imposta forfettaria) is available to foreign nationals who take up Swiss residence but do not carry out any gainful activity in Switzerland. Key rules: (1) Eligibility: must be a non-Swiss national who is taking up Swiss residence for the first time, or who has not been Swiss-resident for at least 10 years. Cannot have any paid employment or business activity in Switzerland. (2) Tax base: the higher of 7× annual rent for the taxpayer's residence, a cantonal minimum (varies — Zurich minimum CHF 400,000; Zug minimum ~CHF 400,000), or actual worldwide living expenses. (3) Rate: normal cantonal + communal + federal rates apply to this deemed income — not to actual income. (4) Benefit: a billionaire with CHF 50M in annual investment income pays Swiss tax on, say, CHF 3.5M (7× CHF 500,000 rent) — approximately CHF 665,000 in tax (at ~19% combined rate, consistent with Zug's effective-rate curve — 17.48% at CHF 500,000, rising gradually at higher deemed-income levels) vs ~CHF 12.5M on actual income. (5) DTA restrictions: lump-sum taxpayers cannot benefit from Switzerland's double tax agreements on their non-Swiss income in many cases. Available cantons: not all Swiss cantons offer lump-sum taxation — Zurich abolished it in 2010; most other cantons retain it.

Switzerland wins decisively for private investors. Swiss CGT on private assets: zero. Selling Swiss or foreign stocks, bonds, investment funds, and most real estate held as private assets: 0% CGT in Switzerland. Exception: professional traders (Gewerbsmässiger Handel) — if the tax authorities determine you trade shares professionally (high frequency, short holding periods, significant leverage, main income source), gains can be reclassified as business income. Most private buy-and-hold investors do not trigger professional trader status. Swiss real estate: CGT on real estate is a cantonal tax (Grundstückgewinnsteuer) — rates vary by canton and holding period; longer holding = lower rate, typically 10%–30% depending on the canton. Austria's CGT (KESt): 27.5% on all capital gains from securities, dividends, and interest — applied at source by Austrian banks. Cryptoassets in Austria: 27.5% KESt applies to crypto gains (since 2022 reform). Cryptoassets in Switzerland: no CGT — applies to private investors. For a EUR 1,000,000 stock portfolio generating 20% gain (EUR 200,000): Switzerland: CHF 0. Austria: EUR 55,000 (27.5%). Switzerland saves €55,000 on a single realisation.