Comparison · Wealth — Choosing a European tax residence

Lump-sum tax regimes, Italy vs Switzerland:
the direct comparison for choosing a European tax residence

Since the entry into force of the Italian Finance Act for 2026 (art. 1), the Italian lump sum under article 24-bis TUIR has reached EUR 300,000 per year for new entrants, after a first increase from EUR 100,000 to EUR 200,000 introduced by Italian Decree-Law 113/2024 of 9 August 2024. Switzerland, whose expenditure-based taxation was upheld by federal referendum in 2014, retains an indexed federal floor of CHF 434,700 (approximately EUR 450,000). Two regimes, two philosophies: one capped in time but transparent in cost, the other lifelong but subject to an annual comparison clause and to divergent cantonal floors. The firm sets out the decision grid that significant estates in the process of European relocation have requested most frequently over the past eighteen months.

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Analysis by Me Jonathan Bensaid · Tax lawyer · Paris · Geneva · Marseille · Cannes · Lisbon
— In brief
Minimum annual cost
Italy: EUR 300,000 (substitute lump sum, new electing taxpayers since 1 Jan. 2026) · Switzerland: CHF 434,700 federal floor, more depending on the canton
Duration
Italy: 15 years, non-renewable · Switzerland: lifelong subject to continued eligibility
Eligibility
Italy: non-resident for 9 of the last 10 years · Switzerland: non-resident for 10 years and no gainful activity in Switzerland
Scope
Italy: foreign-source income only · Switzerland: comparison clause against the ordinary scale
Family
Italy: extension at EUR 50,000 per person per year (since 1 Jan. 2026) · Switzerland: a single family assessment (spouse included)
Exit / change
Italy: unilateral exit possible · Switzerland: lifelong, but the cantonal floor may be revised by the legislature
— 01

Why the Italy / Switzerland choice arises now

Four developments have converged since 2024 and are redrawing the European map of wealth-attraction regimes. First, Italian Decree-Law 113/2024 of 9 August 2024 doubled the substitute lump sum of article 24-bis TUIR, from EUR 100,000 to EUR 200,000 per year for taxpayers electing between 10 August 2024 and 31 December 2025. Second, the Italian Finance Act for 2026 (art. 1) enacted a second increase, raising the lump sum to EUR 300,000 per year for new electing taxpayers as from 1 January 2026, and doubling the family extension from EUR 25,000 to EUR 50,000 per member. Three tiers now coexist (EUR 100,000, EUR 200,000, EUR 300,000), each electing taxpayer keeping their entry rate as an acquired right for the remaining term of their election (fifteen years, non-renewable; an anti-retroactivity ratchet). Third, the Portuguese non-habitual resident (NHR) regime was closed to new entrants by the Finance Act for 2024; the transitional IFICI scheme that succeeded it does not attract the same UHNWI clientele. Fourth, several Swiss cantons have raised their floors for expenditure-based taxation in recent years; the federal floor, indexed annually, stands at CHF 434,700 for 2025.

The result is a market, that of European wealth relocations, in which two regimes now stand out as references: the Italian art. 24-bis TUIR and the Swiss expenditure-based taxation. Both target the same clientele (significant financial estates, income primarily from non-local sources, a search for tax predictability) but rest on opposing logics: Italy chose a single lump sum, capped in time and transparent; Switzerland maintained a long-standing negotiated mechanism, lifelong, framed by an annual comparison clause and by cantonal sovereignty over the floor.

In recent matters, the firm observes that the decision rarely turns on the headline annual cost alone. It depends on the structure of income (financial versus entrepreneurial), the intended length of stay (five, fifteen, twenty-five years), the family composition, nationality (EU/EFTA or not) and, for Switzerland, the canton of residence under consideration. The six axes developed below summarise the grid the firm uses at the initial meeting.

One preliminary clarification is essential: neither regime removes the need for a prior French analysis. The exit tax under article 167 bis of the French Tax Code remains due upon a transfer of tax residence for holders of significant shareholdings; the France-Italy tax treaty of 5 October 1989 and the France-Switzerland tax treaty of 9 September 1966 (as amended by the 2014 Protocol) allocate taxing rights; and the IFI wealth tax remains due on French real estate whatever the country of establishment.

— 02

Six axes of direct comparison

For each axis, the firm sets out the Italian solution, then the Swiss solution, and identifies the criterion that tips the decision.

1. Minimum annual cost: Italy cheaper at face value

Italy: a single substitute lump sum of EUR 300,000 per year on all foreign-source income for new electing taxpayers since 1 January 2026 (Italian Finance Act for 2026, art. 1); EUR 200,000 for taxpayers electing between 10 August 2024 and 31 December 2025; EUR 100,000 for those who elected before 9 August 2024 (acquired right), whatever the amount of income. Italian-source income, by contrast, remains taxed under the ordinary IRPEF scale (23% to 43%) plus regional and municipal surcharges.

Switzerland: the tax base is the highest of (i) seven times the annual rent or the rental value of the home, (ii) the estimated cost of living, and (iii) the statutory floor. 2025 federal floor: CHF 434,700 (LIFD art. 14, indexed). Indicative cantonal floors: Vaud around CHF 415,000, Geneva CHF 400,000, Valais CHF 250,000, Zug CHF 750,000. The total tax actually due depends on the cantonal and municipal scale applied to that base.

Decisive criterion: at face value, Italy almost always wins on annual cost. Switzerland becomes competitive over the total length of establishment, the absence of a time cap, and multi-generational stability.

2. Duration: a 15-year cap vs a conditional lifelong regime

Italy: the election is open for fifteen non-renewable years. At the end of the term, the taxpayer reverts to ordinary taxation if they keep their Italian residence, or must leave the country. The expiry date is known in advance, an asset for estate and wealth planning.

Switzerland: a lifelong regime as long as the eligibility conditions are met: foreign nationality, no gainful activity in Switzerland, and prior non-resident status for ten years. There is no statutory time limit, but the federal and cantonal legislature may change the floors or abolish the regime (five cantons have done so: Zurich, Schaffhausen, Basel-Stadt, Basel-Landschaft, Appenzell Ausserrhoden).

Decisive criterion: for an intended stay of more than fifteen years, Switzerland becomes more relevant. For a horizon of five to ten years (for instance, optimising a planned business sale), Italy is largely sufficient.

3. Eligibility: prior non-residence and professional activity

Italy: the candidate must have been a non-resident of Italy for tax purposes for at least 9 of the 10 years preceding the election. There is no restriction on carrying out a gainful activity in Italy: the electing taxpayer may work there, incorporate a company or run an investment office. The corresponding Italian income is taxed under the ordinary scale, the lump sum covering foreign income only.

Switzerland: a required prior period of ten years of non-residence in Switzerland. A strict prohibition on carrying out any gainful activity in Switzerland: the regime is reserved for persons living off their wealth or off activities carried out exclusively abroad. Personal management of one's own fortune is tolerated; the slightest remunerated service provided from Switzerland jeopardises the regime. For non-EU/EFTA nationals, obtaining the B permit is subject to a cantonal review of the tax interest for the canton.

Decisive criterion: any candidate retaining an operational activity (an active corporate office, consultancy services) should favour Italy. Switzerland requires a complete professional disconnection.

4. Scope: a pure foreign exclusion vs a comparison clause

Italy: a clear substitutive mechanism: the EUR 300,000 lump sum (EUR 200,000 or EUR 100,000 for earlier tiers) releases the electing taxpayer from any Italian taxation on foreign-source income, with the exception of capital gains on qualified shareholdings realised during the first five years (taxed at the ordinary scale). No detailed reporting obligation on foreign assets (derogation from the Italian RW return) and no Italian inheritance tax on foreign assets for the duration of the election.

Switzerland: an annual comparison clause (LIFD art. 14 para. 3): each year, the tax authorities recompute the tax that would be due under the ordinary scale on (i) all Swiss-source income and (ii) the foreign income for which the taxpayer claims the benefit of a double tax treaty. The higher of that ordinary tax and the lump-sum tax is due. In some years the electing taxpayer may therefore find themselves effectively brought back to the ordinary regime.

Decisive criterion: for a portfolio that is 100% foreign financial assets, Italy offers superior clarity. For mixed structures or occasional Swiss income, the Swiss comparison clause requires a prior annual simulation.

5. Family: an extension per member vs a single household assessment

Italy: the election may be extended to each family member (spouse, children, parents, siblings under conditions) for an additional EUR 50,000 per person per year since 1 January 2026 (EUR 25,000 for elections made before that date; the extension was doubled by the Italian Finance Act for 2026, art. 1). Each beneficiary then enjoys the lump sum on their own foreign income, for the remaining term of the main taxpayer's election. A particularly advantageous mechanism for wealthy sibling groups or families with several tax units.

Switzerland: lump-sum taxation is family-based: a single assessment covers the whole household (taxpayer, spouse, minor children). There is no per-member extension. On the other hand, the single family assessment can prove economical for couples without separately taxable children.

Decisive criterion: for an extended family with several financially independent adults, the advantage lies with Italy. For a couple without a fragmented wealth configuration, the point is neutral and the decision shifts to the other axes.

6. Exit and regulatory risk: cantonal sovereignty vs a known expiry date

Italy: a unilateral exit is always possible (revocation of the election by filing). At the end of the 15 years, the taxpayer must choose between remaining in Italy under the ordinary regime or leaving. The main regulatory risk is known and is now twofold: the legislature raised the rate once in 2024 (EUR 100,000 to EUR 200,000) and again in 2026 (EUR 200,000 to EUR 300,000); it could do so again, but taxpayers with an ongoing election keep an acquired right each time for the remaining term (an anti-retroactivity ratchet).

Switzerland: no expiry date, but exposure to cantonal risk: sovereignty over the floor remains cantonal, and floors have been raised in several cantons over the past ten years. Above all, five cantons have abolished the regime by popular vote: Zurich (2010), Basel-Stadt (2010), Appenzell Ausserrhoden (2010), Schaffhausen (2014), Basel-Landschaft (2014). Choosing the canton is therefore both a choice of the initial floor and a bet on political stability.

Decisive criterion: tolerance for cantonal regulatory uncertainty over several decades. Historically the most stable cantons (Vaud, Geneva, Valais, Ticino, Zug) remain the natural destinations for the regime.

— 03

Decision grid by wealth profile

Beyond the technical comparison, the firm observes four archetypes of candidates for whom the recommendation polarises sharply. First profile: the entrepreneur exiting their capital: a planned sale of a significant shareholding within five to ten years, the need for a short regime to absorb the capital gain and the first post-sale dividends, and a possible return to France or another EU country in due course. Italy is almost always the answer: EUR 300,000 per year caps the taxation of foreign dividends and financial income, the 15-year term amply covers the divestment cycle, and the exit can be planned.

Second profile: the wealthy retiree seeking multi-generational stability: a consolidated estate, a lifelong horizon, succession as the primary concern, and a low appetite for regulatory risk. Switzerland prevails: the lifelong nature of the regime, a recognised quality of life, the long-standing political stability of the traditional French-speaking and German-speaking cantons, and smooth estate planning through the bilateral treaties. The annual premium over Italy is offset by removing the uncertainty of the fifteenth-year expiry.

Third profile: the collector and art dealer: an estate concentrated in cultural assets, a market ecosystem that shapes decision-making (galleries, auction houses, fairs), and a decisive peer network. Milan, Venice, Florence, Rome: Italy offers a world-class ecosystem, and the 24-bis lump sum does not penalise foreign capital gains on works of art (subject to the qualified-shareholding rule during the first five years). Switzerland remains relevant for those who favour Geneva and Zurich, but the Italian advantage is clear here.

Fourth profile: the private banker, family wealth manager or family officer: a need for proximity to the financial centres, a dense banking and fiduciary infrastructure, and a historic banking secrecy (now framed by the CRS standards and the 2014 Protocol). Geneva and Zurich remain international references. Switzerland naturally prevails, provided the candidate accepts the constraint of having no local gainful activity, which requires careful structuring of offices held and of interests in offshore management companies.

For mixed profiles (entrepreneurs still active, multi-unit families, estates with a significant French real-estate component), the firm proceeds by comparative numerical simulation over ten years before any decision. The grid above is a first-order heuristic; the final decision requires a personalised analysis integrating the French exit tax, the residual IFI on French real estate, structuring costs and the applicable bilateral treaties.

— Frequently asked questions

The Italy / Switzerland choice in practice

Which of the two regimes actually costs less over ten years?

Italy remains cheaper in headline annual cost in most configurations, even after the move to EUR 300,000 per year on 1 January 2026: EUR 300,000 per year against, depending on the Swiss canton chosen, a total tax derived from a base of CHF 400,000 to CHF 750,000, in practice a combined Swiss federal, cantonal and municipal tax often between CHF 200,000 and CHF 450,000 per year (varying by canton and municipality). The gap has narrowed since the Italian Finance Act for 2026: for the most competitive cantons (Valais, Vaud), the choice becomes less clear-cut on headline cost, and the decision shifts to the other axes (duration, scope, family). Over ten years, the cumulative gap can reach several hundred thousand euros in Italy's favour. But the calculation changes radically beyond fifteen years, when Italy becomes inaccessible and returning to ordinary Italian taxation, or moving again, is costly, whereas Switzerland, being lifelong, continues to produce its effects.

What happens to the French IFI and to taxable wealth once relocated to Italy or Switzerland?

The French IFI remains due, on French-situs real estate and real-estate rights only, whatever the country of tax residence. Relocating to Italy or Switzerland does not remove it. Italy has no wealth tax (apart from IVIE and IVAFE on foreign assets, from which the 24-bis taxpayer is exempt). Switzerland has a cantonal wealth tax that applies in principle, but the lump-sum regime neutralises that additional cost for the foreign portion of the estate covered by the lump-sum base. A precise cantonal analysis is indispensable.

Is the French exit tax under article 167 bis of the French Tax Code due in both cases?

Yes, under the same conditions. Transferring one's tax domicile out of France triggers the exit tax for holders of significant shareholdings (>= 50% in a company, or a portfolio >= EUR 800,000). The automatic deferral mechanism operates in both directions, Italy and Switzerland alike, subject to filing and, for Switzerland, to providing guarantees since the adjustment resulting from European case law. The deferral may lead to a definitive relief at the end of the statutory period, provided the securities are not sold and the annual filing obligations are met. The firm systematically secures this aspect ahead of the move.

Is it possible to switch from the Italian regime to the Swiss regime while the election is running?

Yes, but with precautions. The 24-bis taxpayer may revoke their election at any time and transfer their residence to Switzerland. They will then have to satisfy the condition of ten years of prior non-residence in Switzerland, often met where the candidate originally came from France or another third country, and obtain the B permit. They will never again be able to benefit from the 24-bis lump sum (the election may be exercised only once in a taxpayer's lifetime). The reverse move, from Switzerland to Italy, is also possible, subject to the Italian 9-out-of-10-years condition, which is harder to rebuild if the Swiss stay has been long.

What happens to my French real estate during and after the election?

French real estate remains taxable in France in all cases (France-Italy treaty of 1989, art. 6; France-Switzerland treaty of 1966, art. 6): property income under the non-resident scale, real-estate capital gains under art. 244 bis A of the French Tax Code, and annual IFI. Neither regime, Italian or Swiss, alters this treatment. For significant French real-estate holdings, the firm frequently structures through an SCI subject to corporate income tax or a prior division of ownership to optimise the recurring cost and the transfer, independently of the Italy / Switzerland residence choice.

Is a secondary residence in France compatible with the election?

Yes, provided it does not amount to tax residence under French domestic law. Article 4 B of the French Tax Code sets out four alternative tests (home, main place of stay, professional activity, centre of economic interests). Keeping a secondary residence, for instance in Paris, on the French Riviera or in the mountains, is not in itself a trigger, but becomes risky if the time spent there exceeds 183 days or if the family lives there. The bilateral treaties (France-Italy 1989, France-Switzerland 1966) provide the tie-breaker rules in the event of dual residence; the firm secures this point with a documented year-by-year presence timeline.

Are the foreign companies I own taxable in Italy or Switzerland?

Italy: the profits of foreign companies you control are neutralised by the substitute lump sum as long as they are not distributed, and foreign distributions fall within the scope of the lump sum. Beware of the Italian CFC regime (art. 167 TUIR): the 24-bis taxpayer is exempt from it on the foreign perimeter, a major advantage of the scheme. Switzerland: there is no general CFC regime; foreign distributions enter the annual comparison base. For family holding and family office structures, a comparative numerical analysis is indispensable; the firm systematically runs this simulation before any decision.

How should I prepare the transfer to my children from Italy or Switzerland?

Italy applies some of the lowest inheritance and gift taxes in Europe (4% in the direct line above a EUR 1 million allowance per beneficiary), and the 24-bis taxpayer benefits from an exemption for foreign assets for the duration of the election. Switzerland has no federal inheritance tax; some cantons fully exempt transfers in the direct line (Vaud, Geneva under conditions, Zug, Schwyz). The choice depends on the heirs' nationality, their residence, and the location of the assets transferred. The Franco-Italian inheritance convention of 1990 and the Franco-Swiss inheritance convention of 1953 strictly frame conflicts of sovereignty; the firm builds the chain treaty by treaty.

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Choosing between Italy and Switzerland for your wealth relocation?

An initial confidential discussion to frame your matter: a comparative numerical simulation over ten years, analysis of the exit tax and the residual IFI, transfer sequence, choice of Swiss canton or Italian city, and the France-Italy or France-Switzerland treaty articulation.

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© BENSAID Avocats. The information published on this site does not constitute legal advice and cannot replace a personalised analysis. Comparison based on the regimes in force in June 2026. Italian and Swiss legislation changes regularly; any operation requires validation by a local lawyer. Sources: Italy: art. 24-bis TUIR; Decree-Law 113/2024 of 9 August 2024, converted by L. 143/2024 (lump sum raised from EUR 100,000 to EUR 200,000/year for taxpayers electing between 10 August 2024 and 31 December 2025); Legge di bilancio 2026 (Italian Finance Act for 2026), art. 1 (lump sum raised to EUR 300,000/year and family extension raised to EUR 50,000 per member, for new electing taxpayers as from 1 January 2026; earlier electing taxpayers keep their rate as an acquired right / grandfathering); France-Italy tax treaty of 5 October 1989; France-Italy inheritance convention of 20 December 1990. Switzerland: LIFD art. 14 (expenditure-based taxation, federal floor indexed annually, CHF 434,700 for 2025); LHID art. 6; cantons having abolished the regime by popular vote: Zurich (2010), Basel-Stadt (2010), Appenzell Ausserrhoden (2010), Schaffhausen (2014), Basel-Landschaft (2014); France-Switzerland tax treaty of 9 September 1966 and Protocol of 25 June 2014; France-Switzerland inheritance convention of 31 December 1953. France: art. 4 B, 167 bis, 244 bis A of the French Tax Code; art. 964 et seq. of the French Tax Code (IFI). Editorial update: 1 June 2026.