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Administrative procedures
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Domiciliation of your company
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Companies creation
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Switzerland: An attractive tax system
You find that you pay a lot of taxes in your country? Are you considering expatriation, exclusively or partly for this reason? You should know that Switzerland is a preferred destination for many people, because of its attractive tax system and better quality of life.
However, an expatriation is a definitive decision with many consequences. It cannot be considered without thinking about the personal aspects, which will be decisive in your choice. In addition, some countries, such as France, may apply what is called an exit tax. Our firm is here to assist you in your approach and the expatriation process.
You find that you pay a lot of taxes in your country? Are you considering expatriation, exclusively or partly for this reason? You should know that Switzerland is a preferred destination for many people, because of its attractive tax system and better quality of life.
However, an expatriation is a definitive decision with many consequences. It cannot be considered without thinking about the personal aspects, which will be decisive in your choice. In addition, some countries, such as France, may apply what is called an exit tax. Our firm is here to assist you in your approach and the expatriation process.
When are you considered a Swiss tax resident?
An individual is considered a tax resident in Switzerland if he or she resides there “with the intention of settling there permanently”. In case of alternative residence in two countries, the person is considered as a Swiss tax resident if he has his strongest ties there. This is called the center of vital interests.
If you only live in Switzerland, except in very special cases (international organizations, diplomats), you are a Swiss tax resident. On the other hand, if you live in two countries, one of which is Switzerland, you will have to identify the center of vital interests. This is determined according to your economic and personal interests. The situation is analyzed on a case by case basis and in an objective manner.
As far as France is concerned, the Franco-Swiss agreement of April 11, 1983 must also be taken into account. Indeed, the latter specifies that a person working in certain cantons, with the notable exception of the canton of Geneva, but residing in France, is liable to pay tax in France on his or her Swiss employment income. The same applies to your cryptocurrencies.
The example of France: the concept of tax domicile
According to article 4B of the French General Tax Code (CGI), a person is considered a tax resident of France if he or she meets only one of these three criteria:
- Presence of a household (spouse and/or children) or main place of residence,
- Exercise of a professional activity, salaried or not, on a principal basis,
- Center of economic interests.
It is therefore necessary to be certain that none of these criteria are met at the time of departure before considering expatriation.
Expatriation to Switzerland
If, for example, you leave France for Switzerland and you are married with children, your spouse and your child(ren) must accompany you. Otherwise, except in very special cases, you will still be considered a French tax resident. This is one of the reasons why expatriation is an important decision, as it implies the departure of the whole family.
Secondly, if none of the three criteria are met, you must be certain to be considered a Swiss tax resident. Thus, you must at least find a place of residence, be registered with the municipality of your domicile and have applied for a residence permit. If there are several ways to be domiciled in Switzerland, it is essential to be effectively domiciled.
Once you have acquired residency, you will be registered with the cantonal population office, thus confirming your new fiscal residence. However, it is necessary to pay attention to an often forgotten point: the exit tax.
The exit tax issue
Once again, we take the example of France. Article 167 bis of the CGI provides, in case of transfer of the tax residence abroad, a taxation of the latent capital gains of “social rights, securities and rights”. This special tax is commonly referred to as exit tax.
This exit tax is due when the taxpayer holds :
- 50% of the rights to the profits of a company or,
- An asset in “securities” equal or superior to 800 000 €.
The question is whether or not the exit tax applies to cryptocurrencies or digital assets according to the legal terminology in French law. To date, there is no clear answer from the tax authorities. However, the interpretation made of the provisions of French law relating to this exit tax generally excludes its application to unrealized capital gains in cryptocurrencies.
Moreover, this issue would only arise if your securities holdings exceed €800,000, including cryptocurrencies.
Use our services for your expatriation in Switzerland
We accompany people, especially those domiciled in France for tax purposes, who wish to expatriate to Switzerland. If you want a clear and simplified guidance on this subject, call Me Alex Naray and his team.
Thanks to his experience and his links with tax lawyers in France, Me Naray is the right person to accompany you in your expatriation project.
Contact us now for more information about our expatriation services in Switzerland!