Hub · Wealth & non-residents — Tax-residence arbitrage

Lump-sum tax regimes in Europe:
three regimes, three philosophies

Italy, Switzerland, Portugal — Europe has three lump-sum tax regimes historically designed to attract an ultra-high-net-worth non-resident clientele. Italy raised its entry ticket to EUR 300,000 per year for new applicants under the Italian Budget Law for 2026 (art. 1) — after a first doubling from EUR 100,000 to EUR 200,000 under the Decree-Law of 9 August 2024 — over fifteen non-renewable years. Switzerland maintains its expenditure-based taxation, lifelong, with a federal floor of CHF 434,700 and cantonal floors that may double that threshold. Portugal, for its part, closed its NHR regime to new entrants on 1 January 2024. The firm advises entrepreneurial families, executives selling their business and holders of international assets on the arbitrage between these regimes — and on securing the French exit: exit tax, IFI wealth tax, bilateral treaties, transfer duties.

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Analysis by Maître Jonathan Bensaid · Tax lawyer · Paris · Geneva · Marseille · Cannes · Lisbon
— In brief
Italy — art. 24-bis TUIR
EUR 300,000/year on foreign-source income (new applicants from 1 January 2026) · 15 years non-renewable · family extension EUR 50,000/person
Switzerland — LIFD art. 14
Expenditure-based taxation · federal floor CHF 434,700 · lifelong · no gainful activity in Switzerland
Portugal — NHR
Historic regime closed to new entrants since 1 January 2024 · IFICI/NHR 2.0 reserved for research
Common eligibility
Non-resident for tax purposes in the host country during the 9 or 10 years preceding the election
French articulation
Departure from tax residence, French Tax Code art. 4 B · exit tax art. 167 bis · IFI on French real estate maintained
Procedure
Italy: advance ruling possible · Switzerland: prior cantonal ruling indispensable
— 01

Why these regimes attract — and why the arbitrage demands more than a comparison of tax scales

Three drivers structure the appeal of European lump-sum regimes for ultra-high-net-worth families. First, the exemption — total or substitutive — of foreign-source income: dividends from non-resident holdings, interest from offshore portfolios, royalties, capital gains on the sale of non-qualified shareholdings. An executive selling their company for one hundred million euros and rebuilding a worldwide dividend portfolio will pay, in Italy, EUR 300,000 per year — whatever the scale of the flow. It is the absolute capping of the bill that makes the difference with the French progressive scale, which peaks — income tax and social levies combined — at around 30% on financial income and 45% on earned income.

Second, legal certainty. Italy enshrined its regime in the TUIR through article 24-bis, introduced in 2017; both the first doubling of the entry ticket under Decree-Law no. 113/2024 of 9 August 2024 (EUR 100,000 → EUR 200,000) and the second increase under the Italian Budget Law for 2026 (art. 1, EUR 200,000 → EUR 300,000) expressly preserved the earlier rates for applicants already in place (grandfathering / anti-retroactive ratchet effect). Switzerland offers the certainty of a domestic-law arrangement — expenditure-based taxation, codified in article 14 LIFD — underpinned by a century-old cantonal practice. This stability contrasts with the volatility of more political regimes — the Portuguese NHR closed in 2024, the British Non-Dom reformed from April 2025.

Third, quality of life and the wealth ecosystem — Zurich and Geneva private banks, Milanese and Roman art advisory, international educational infrastructure, climate. None of these motives is sufficient on its own: it is their combination that makes the arbitrage rational.

But the firm cautions against the temptation of purely arithmetical reasoning. Three blind spots dominate the matters the firm takes over for a second opinion. First, the French exit is never neutral: the exit tax of article 167 bis of the French Tax Code applies to unrealised gains on substantial shareholdings as soon as tax domicile is transferred; the IFI wealth tax remains due on French real estate; the FR-IT (1989) and FR-CH (1966) treaties require a careful analysis of treaty residence, the centre of vital interests and tie-breaker rules. Second, the Swiss regime requires the absence of gainful activity on Swiss soil — an executive who retains an operational mandate, even unpaid, weakens their position. Third, the Italian election excludes certain capital gains on the sale of qualified shareholdings during the first five years — a classic trap for the newly relocated founder who disposes of their former controlling block.

— 02

Italy, Switzerland, Portugal — six axes to decide

The firm reduces the arbitrage to six operational axes. Each axis is resolved differently by the three jurisdictions; none dominates on every count.

1. Eligibility — the prior non-residence condition

Italy — not an Italian tax resident during 9 of the last 10 years preceding the election (TUIR art. 24-bis, §1). Switzerland — foreign nationality and absence of tax residence in Switzerland during the 10 preceding years; cumulative condition of no gainful activity on Swiss territory (LIFD art. 14, §1). Portugal — for former NHR beneficiaries, the condition was non-residence for 5 years; with the regime closed since 2024, only prior holders retain their rights for the residual duration of the ten years.

2. Minimum amount — an order of magnitude to factor in from the outset

Italy — EUR 300,000 flat per year for new applicants from 1 January 2026 (Italian Budget Law for 2026, art. 1) — previously EUR 200,000 (D.L. no. 113/2024 of 9 August 2024, in force until 31 December 2025) and EUR 100,000 for applicants before 9 August 2024, plus EUR 50,000 per attached family member since 1 January 2026 (EUR 25,000 previously). Switzerland — base = multiple of the rent (× 7) or standard of living, the higher of the two; subject to a federal floor of CHF 434,700 (LIFD art. 14, §3, indexed) and to variable cantonal floors: VS ≈ CHF 250,000, GE CHF 400,000, VD ≈ CHF 415,000, ZG CHF 750,000. Portugal — historically, a flat rate of 20% on income from "high-value-added" activity and exemption of most foreign passive income (10% since 2020 on pensions).

3. Duration — timing governs the wealth strategy

Italy — 15 non-renewable years. This firm limit governs, from the very first year, an exit strategy: sale of liquid assets, release of holding reserves, early wealth transmission. Switzerland — a lifelong regime for as long as the conditions are met and for as long as the canton of residence maintains it (subject to the reservation of abolitions by popular vote). Portugal (historic NHR) — 10 non-renewable years, benefiting pre-2024 applicants until their period expires.

4. Scope of income covered — the decisive question

Italy — the lump sum substitutes the whole of IRPEF and social levies on foreign-source income, with the notable exception of capital gains on the sale of qualified shareholdings during the first five years (TUIR art. 24-bis, §2, lett. b). Italian-source income remains taxed under the ordinary scale. Switzerland — the expenditure base integrates the whole standard of living, without distinction of source; an annual control computation (Kontrollrechnung) confronts the lump-sum tax with an "ordinary" tax computed on Swiss income and foreign income exempted by treaty: the higher is due. Portugal — treaty exemption of dividends, interest, royalties and foreign-source capital gains, subject to possible taxation in the source State.

5. Capital gains and substantial shareholdings — the founder's trap

Italy — capital gains on the sale of qualified shareholdings realised within the first five years of the election remain taxable under the ordinary Italian scale (approx. 26%). The relocated founder must therefore either dispose before their Italian settlement (with the risk of French exit tax), or wait for the sixth year — an arbitrage that can cost several million. Switzerland — no analogous specificity: private capital gains on securities are in principle not taxable in Switzerland for an individual (unless characterised as a quasi-professional), which makes it the jurisdiction of choice for the founder in a sale. France upstream — the exit tax of French Tax Code art. 167 bis remains due if the thresholds are crossed, with a quasi-automatic payment deferral to the EU/EEA but monitoring over fifteen years.

6. Exit from the regime — anticipating the end of the arrangement

Italy — exit on request at any time, or automatically in the event of non-payment of the lump sum. At the end of the 15 years, return to Italian ordinary law: a progressive scale peaking at 43% above EUR 50,000, plus regional and municipal taxes. Switzerland — exit by option (switch to the ordinary regime), loss of exclusive foreign nationality (acquiring Swiss nationality forfeits the right to the lump sum in several cantons), or exercise of a gainful activity in Switzerland. Portugal — end of the 10-year period: return to the Portuguese ordinary scale; no renewal possible.

— 03

Our approach at the firm — cross-border arbitrage FR ↔ IT ↔ CH

The firm — established in Paris, Geneva, Marseille, Cannes and Lisbon — advises entrepreneurial families, executives selling their business and holders of international assets on the entire arbitrage sequence. The firm conducts a costed multi-jurisdictional comparative analysis — Italy, Switzerland, Portugal, but also the United Kingdom (reformed in 2025), Belgium, Monaco, the Emirates — to identify the regime matching the income profile, the wealth timing and the family constraints.

On the French upstream, the firm secures the departure from French tax residence within the meaning of article 4 B of the French Tax Code and of the applicable treaty, triggers under the best conditions the 2074-ETD return relating to the exit tax of article 167 bis, structures the disconnection of the centres of economic interest, organises the repatriation or sale of sensitive assets before the threshold is crossed, and coordinates the update of the IFI and of the 3916 reporting obligations.

On the Italian downstream, the firm handles the election under article 24-bis of the TUIR with, where appropriate, a request for a ruling preventivo from the Agenzia delle Entrate; on the Swiss downstream, it negotiates the prior ruling of the chosen canton — Geneva, Vaud, Valais or Ticino depending on the profile — factoring in the cantonal floors and the control computation. The firm maintains a continuous dialogue with a network of Milanese and Roman avvocati tributaristi and qualified Swiss Steuerberater, a guarantee of the enforceability of the structures before local authorities.

— Frequently asked questions

European lump-sum tax — what international families ask the firm

Am I eligible for the Italian or Swiss lump-sum regime?

Italian eligibility assumes that you have not been an Italian tax resident during 9 of the 10 years preceding the election (TUIR art. 24-bis). Swiss eligibility requires foreign nationality, the absence of Swiss tax residence for 10 years and the absence of gainful activity on Swiss territory (LIFD art. 14). For a French national who has never resided in either country, the condition is generally met — subject to a precise examination of treaty residence within the meaning of the FR-IT (1989) and FR-CH (1966) treaties.

How much does the Italian lump sum actually cost in 2026?

For any new applicant from 1 January 2026, the lump sum is EUR 300,000 per year, plus EUR 50,000 per attached family member (spouse, ascendants, descendants) — amounts set by the Italian Budget Law for 2026 (art. 1). For applicants who exercised the election between 10 August 2024 and 31 December 2025, the lump sum remains at EUR 200,000 and the family extension at EUR 25,000 (regime of D.L. no. 113/2024 converted by L. no. 143/2024). For applicants before 9 August 2024, the rate remains at EUR 100,000. These historic rates are preserved for the entire residual duration of the 15-year election, by express application of acquired rights (anti-retroactive ratchet effect).

Does the Swiss lump sum really cover all my income?

No — that is the classic mistake. Expenditure-based taxation (LIFD art. 14) rests on a base = standard of living or multiple of the rent (× 7), subject to a federal floor of CHF 434,700 and to cantonal floors that can rise to CHF 750,000 (Zug). But each year the taxpayer undergoes a Kontrollrechnung — a control computation: the authorities recompute an ordinary tax on all Swiss income and foreign income exempted by treaty, and retain the higher of the two. A very dynamic asset base may therefore see its lump sum supplanted by the ordinary tax — the arbitrage is never purely nominal.

Is the Portuguese NHR regime still available in 2026?

No for new entrants. The Portuguese Budget Law for 2024 closed the historic NHR to new applications from 1 January 2024. Beneficiaries registered before that date retain their advantages for the residual duration of the 10 years. A replacement regime — NHR 2.0 or IFICI (Incentivo Fiscal à Investigação Científica e Inovação) — was introduced, but it is restricted to scientists, researchers and highly qualified personnel in strictly listed sectors. It is no longer a credible option for the great majority of wealth-holding families.

Does French IFI remain due if I become an Italian or Swiss resident?

Yes, on the scope of French real estate. The IFI (French Tax Code art. 964 et seq.) applies to French tax non-residents in respect of their real estate located in France and of shares in companies predominantly holding French real estate. The Italian lump sum and the Swiss lump sum do not neutralise this tax — which is due to France. Symmetrically, Italy levies no wealth tax (an IVIE of 1.06% is due on real estate held outside Italy, but the 24-bis lump sum substitutes that tax); Switzerland levies a cantonal wealth tax which is integrated, in practice, into the negotiation of the lump sum.

What is the scope of the French exit tax if I settle in Milan or Geneva?

The exit tax of article 167 bis of the French Tax Code applies, upon the transfer of tax domicile out of France, to unrealised gains on substantial shareholdings (as a general rule, exceeding EUR 800,000 or 50% of the share capital). To Italy, an automatic payment deferral applies without constituting guarantees (intra-EU transfer). To Switzerland, the deferral is no longer automatic since the CJEU judgment de Lasteyrie du Saillant; it remains available but may require guarantees. The reporting follow-up (form 2074-ETD) extends over 15 years. The firm structures this exit upstream — often 12 to 24 months beforehand — to avoid involuntary triggers.

When should one arbitrate between Italy and Switzerland? Is there a rule of thumb?

A schematic approach — to be refined case by case — sheds light on the arbitrage. Italy suits primarily families whose annual foreign-source income exceeds roughly EUR 1.5 to 2 million (beyond that, the EUR 300,000 lump sum quickly becomes marginal in percentage terms), over a limited horizon (15 years), with an appetite for Milan or Rome. Switzerland suits very substantial assets with more moderate annual income (the standard-of-living base is more predictable), profiles in a recent sale (the non-taxation of private capital gains is a major advantage), and long or lifelong horizons. The firm systematically produces a costed projection compared at 5, 10 and 15 years integrating the French upstream (exit tax, residual IFI, transfer duties).

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Italy, Switzerland or Portugal — an arbitrage to structure with the firm

A confidential initial consultation to frame your project — costed comparison of the regimes, departure from French tax residence, sale schedule, securing treaty positions, advance ruling. The firm structures your tax relocation by integrating the French upstream and the Italian or Swiss downstream.

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© BENSAID Avocats — The information published on this site does not constitute legal advice and cannot replace a personalised analysis. The figures and rules presented concern the regimes in force in June 2026; check with the firm for any concrete operation, as these arrangements are liable to evolve. Sources: Italy — Testo Unico delle Imposte sui Redditi (D.P.R. 22 dicembre 1986, no. 917), art. 24-bis; Decreto-Legge 9 agosto 2024, no. 113 (conv. L. 7 ottobre 2024 no. 143) raising the lump sum from EUR 100,000 to EUR 200,000 (entries from 10 August 2024 to 31 December 2025); Legge di bilancio 2026 (Italian Budget Law for 2026), art. 1, raising the lump sum to EUR 300,000 and the family extension to EUR 50,000/member for new applicants from 1 January 2026; Agenzia delle Entrate, circolare no. 17/E del 23 maggio 2017. Switzerland — Federal Act on Direct Federal Taxation (LIFD) of 14 December 1990, art. 14; Act on the Harmonisation of Direct Taxes of the Cantons and Communes (LHID) art. 6; AFC, circular no. 44 of 24 July 2018; abolitionist cantonal revisions: Zurich (vote of 8 February 2009), Schaffhausen (2014), Basel-Stadt (2010), Basel-Landschaft (2014), Appenzell Ausserrhoden (2010); federal floor CHF 434,700 indexed annually by ordinance of the Federal Council. Portugal — Código do IRS, art. 16 (NHR regime repealed for new entrants by the Lei do Orçamento do Estado para 2024); new IFICI/NHR 2.0 regime instituted by the same law. France — French Tax Code art. 4 B (tax residence), art. 167 bis (exit tax), art. 964 et seq. (IFI), bilateral tax treaties France-Italy of 5 October 1989 and France-Switzerland of 9 September 1966 (multiple amendments). Editorial update: 1 June 2026.