Target Audience: HNWIs considering the French-speaking region
Reading Time: 4 Minutes
One of the most common myths we hear from clients moving to Switzerland is: “I have money, so I should obviously choose the Lump-Sum tax.”
In 2026, for the Canton of Geneva, this is often false.
While the “Forfait Fiscal” (Lump-Sum) is famous for a reason, Geneva’s unique ordinary tax rules—specifically the “Tax Shield”—often make the standard regime cheaper for portfolios under CHF 20 million. Here is the math you need to see before you negotiate your permit.
The Contenders
1. Ordinary Taxation (with the “Shield”)
- How it works: You pay Wealth Tax on your assets + Income Tax on your earnings.
- The Secret Weapon: The Bouclier Fiscal (Tax Shield). Geneva law limits your total cantonal and municipal taxes to roughly 60% of your net taxable income.
- Why it matters: If you live off your capital (selling portfolio assets) and generate very little “taxable income” (dividends/interest), your tax bill is artificially crushed by this cap.
2. Lump-Sum Taxation (The “Forfait”)
- How it works: You ignore your actual wealth and income. Instead, you are taxed on an artificial income figure based on your lifestyle (minimum 7x your annual rent).
- The 2026 Floor:
- EU/EFTA Nationals: Expect a minimum tax bill of ~CHF 150,000 – 170,000 per year.
- Non-EU Nationals: The entry ticket is steeper, often requiring a minimum tax bill of ~CHF 340,000+ per year (based on a higher deemed income threshold).
The Showdown: Who Wins?
To see which regime fits you, we have run three scenarios for a hypothetical relocation to the City of Geneva.
Scenario A: “The Passive Investor”
- Profile: CHF 10M Portfolio. Living off capital gains (tax-free). Low taxable yield (dividends/interest) of CHF 100k/year.
- Ordinary Tax: Your wealth tax should be ~CHF 100k. But because your income is low, the Tax Shield kicks in. It caps your tax at ~60% of your income.
- Result: You pay ~CHF 60,000.
- Lump-Sum: You must pay the minimum fixed expense tax.
- Result: You pay ~CHF 160,000 (Minimum).
- Winner: 🏆 Ordinary Taxation (You save ~CHF 100k/year).
Scenario B: “The High-Income Earner”
- Profile: CHF 10M Portfolio. Still working or receiving large dividends/consulting fees of CHF 1M/year.
- Ordinary Tax: You pay full income tax (~45% on the 1M) + full wealth tax. The Shield does not help because your income is too high.
- Result: You pay ~CHF 550,000.
- Lump-Sum: Your “lifestyle expense” is calculated. Even if you live in a nice villa (CHF 10k/month rent), your tax base is low compared to your real income.
- Result: You pay ~CHF 160,000 – 200,000.
- Winner: 🏆 Lump-Sum Taxation (You save ~CHF 350k/year).
Scenario C: “The Ultra-High-Net-Worth”
- Profile: CHF 100M+ Portfolio.
- Ordinary Tax: The wealth tax alone (1%) is massive.
- Result: You pay ~CHF 1,000,000.
- Lump-Sum: The tax is based on your living expenses, not your 100M assets. As long as you don’t rent a castle for CHF 1M/year, your tax stays low.
- Result: You pay ~CHF 200,000.
- Winner: 🏆 Lump-Sum Taxation (The classic “Billionaire’s Deal”).
The Verdict
| Your Profile | Recommended Regime |
| Wealth < CHF 20M & Low Income | Ordinary Tax (Leverage the Tax Shield) |
| Wealth < CHF 20M & High Income | Lump-Sum (Shield your income) |
| Wealth > CHF 20M | Lump-Sum (Shield your wealth) |
| Non-EU National | Lump-Sum (Often required for the visa anyway) |
💡 Your Action Plan
Before you sign a lease in Geneva:
- Draft a “Shadow Tax Return”: Calculate your taxable yield (dividends + interest). Capital gains are invisible, so do not count them.
- Check the Rent Multiplier: If you choose Lump-Sum, remember the “7x Rent” rule. If you rent an expensive penthouse for CHF 20,000/month, your Lump-Sum bill skyrockets, potentially ruining the benefit.