For an Australian post-exit founder or a senior executive with substantial passive global income, moving from Australia to Switzerland under the lump-sum taxation regime (forfait fiscal / Pauschalbesteuerung) compresses a top Australian marginal rate of 47% (45% income tax plus 2% Medicare levy) to a negotiated annual figure starting at the federal minimum tax base of CHF 435,000 (2026) — typically settling at CHF 600,000–CHF 1,000,000+ per year once the cantonal minimum bites. The two binding constraints are well known: the Swiss-side requirement that you take no gainful employment inside Switzerland and that this is your first Swiss tax residency (or that you’ve been abroad 10+ years), and the Australian-side gotcha that bites every emigrating Australian regardless of destination — CGT Event I1 under section 104-160 ITAA 1997 deems a disposal of every non-Australian CGT asset on the day you cease residency. Unlike the Australia-to-Monaco case, Australia and Switzerland have an in-force comprehensive DTA with a working Article 4 tie-breaker — but forfait holders should plan for the possibility of a modified forfait to preserve treaty access.
The Tax Delta at a Glance
| Australia (current) | Switzerland (after move, lump-sum) | |
|---|---|---|
| Personal income tax | 0–45% progressive + 2% Medicare levy (top marginal 47%) + up to 1.5% Medicare levy surcharge | Federal minimum tax base CHF 435,000 (2026) plus cantonal minimum; tax on Swiss expenditure, not worldwide income |
| Capital gains tax | Marginal rate; 50% CGT discount on assets held >12 months; discount denied to non-residents on Taxable Australian Property gains accrued post-8 May 2012 | 0% on private movable assets (shares, bonds, crypto held privately) under standard rules; absorbed into the forfait under lump-sum |
| Dividend tax | Marginal rate; franking credits offset Australian-company dividends; 30% non-resident withholding on unfranked dividends post-departure (reduced to 5–15% under the AU-CH DTA) | Replaced by the lump-sum bill; control calculation may apply Swiss rates to Swiss-source dividends |
| Wealth / inheritance | No estate tax, but CGT on death is deferred, not forgiven for non-resident beneficiaries | Cantonal wealth tax 0.1–1% on imputed assets; most cantons exempt inheritance to spouses and direct descendants |
| Worldwide vs territorial | Worldwide for residents; CGT Event I1 deemed disposal on cessation | Worldwide under standard system; expenditure-based under the forfait |
| Effective rate (Sydney founder, AUD $5M passive income) | ~45% | ~10–14% of the AUD $5M — i.e. roughly CHF 600K–CHF 1M flat |
For a Melbourne or Sydney founder anticipating an AUD $30M trade sale and continuing AUD $5M of passive portfolio income annually, the difference between the Australian top rate (~47% on income, ~23.5% effective on long-held shares after the 50% CGT discount) and a Geneva or Vaud forfait of around CHF 600,000–CHF 1,000,000 per year is on the order of AUD $1.2M–$1.8M of annual cash savings plus an eight-figure CGT saving on the eventual disposal — provided the section 104-160 deemed disposal is correctly modelled and the post-exit sale is genuinely a Swiss-resident sale.
Step-by-Step Move
Step 1: Confirm you can legally cease Australian tax residency
Australia uses a multi-test residency framework, not a clean day-count rule. Four tests apply, and satisfying any one of them keeps you Australian-resident: (a) the “resides” test — a facts-and-circumstances common-law test of where you ordinarily live; (b) the domicile test — an Australian-domiciled person remains resident unless the Commissioner is satisfied your permanent place of abode is outside Australia; (c) the 183-day test — physical presence for at least 183 days in the income year unless your usual place of abode is overseas and you do not intend to take up residence in Australia; and (d) the Commonwealth superannuation fund test for certain government employees.
The two tests that trip up departing Australians are the domicile test and the resides test. Taxation Ruling IT 2650 lists the operative factors: intended and actual length of stay overseas, intention to return, establishment of an overseas home, abandonment of any Australian residence, durability of association with the overseas place, and continuing economic, social and family ties in Australia. The Harding v Commissioner of Taxation [2019] FCAFC 29 decision held that a permanent place of abode requires “permanence” in a meaningful sense — a Swiss long-term lease or owned home with utility connections, family relocation, registered communal residency and a written cantonal forfait ruling clears the threshold; serviced-apartment hopping does not.
A clean Australia-to-Switzerland departure typically requires: leasing or selling the Australian principal residence on arm’s-length terms (a furnished house “available for visits” is fatal under IT 2650 / Harding); moving the family unit to the chosen canton; surrendering Medicare; cancelling Australian state driver’s licences; opening Swiss bank accounts; and registering with the Einwohnerkontrolle / Contrôle des habitants within 14 days of arrival. Switzerland’s 183-day requirement is the practical bar for forfait holders.
Step 2: Plan around Australia’s CGT Event I1 deemed disposal
The single largest gotcha is CGT Event I1 under section 104-160 ITAA 1997: at the moment you cease to be an Australian resident, you are treated as having disposed of each CGT asset you own at its market value on the day, with any resulting capital gain or loss assessed in your final-year return. There is no de minimis — every listed share, every cryptocurrency holding, every foreign rental property, every interest in a foreign trust, every private-company shareholding outside the Taxable Australian Property net is in scope.
Taxable Australian Property (TAP) under section 855-15 is excluded from CGT Event I1 — primarily direct interests in Australian real property; indirect Australian real property interests (broadly, ≥10% holdings in entities whose value is principally Australian land); assets used in a business through an Australian permanent establishment; and options or rights over the foregoing. Crucially, the 50% CGT discount is denied to non-residents on the portion of TAP gains accrued from 8 May 2012 onwards under section 115-115. Obtain a market valuation at the date of departure for any retained TAP and keep it on file.
For everything else, section 104-165 offers an election to disregard CGT Event I1 for any or all non-TAP assets, in which case the elected assets are deemed to be TAP going forward and remain in the Australian CGT net until actual disposal. The election is permanent. For Australian founders sitting on long-held shares facing a near-term sale, paying the departure tax with the 50% CGT discount tends to be the cleaner outcome — once Swiss-resident under the forfait, the eventual disposal is absorbed in the lump-sum bill rather than taxed at Australian non-resident rates without the discount. The election fits niche cases: low-basis growth assets you may hold for decades and possibly liquidate after a future return to Australia.
Step 3: Establish Swiss tax residency under the forfait
Swiss lump-sum residency runs through a written ruling negotiated with a specific canton’s tax administration. Eligibility is precise: non-Swiss national (Australians qualify); first time taking Swiss tax residency, or returning after at least 10 years abroad; no gainful activity inside Switzerland (passive management of own assets and serving on foreign company boards is generally fine — running a Swiss-based business is not).
The negotiated tax base is the higher of: (i) annual worldwide living expenditure attributable to Switzerland; (ii) seven times the rental value of the family’s Swiss home (or actual rent paid); (iii) the federal minimum CHF 435,000 (2026); or (iv) the cantonal minimum — which in Geneva and Vaud effectively sets total minimum tax in the range of CHF 450,000–600,000+ per year. Central-Switzerland cantons (Zug, Schwyz, Nidwalden) are typically lower; Valais and Ticino are competitive on lifestyle. A “control calculation” applies normal Swiss rates to certain Swiss-source income and Swiss real estate to ensure the lump-sum tax is at least as high as ordinary tax on those items.
The full destination-side breakdown — eligible cantons, the standard versus modified forfait, the Swiss B-permit pathway and the route to a C settlement permit and naturalisation — sits on the Switzerland country page. To be a Swiss tax resident, plan for 183+ days/year physically in the canton.
Step 4: Document the break and the new tie
Collect contemporaneously: the Swiss residence permit (B), the registered cantonal forfait ruling, the long-term lease or title deed, Swiss bank statements, monthly utility bills, mandatory Swiss health insurance certificates, school enrolment for any dependants, and the Swiss tax-residency certificate issued by the canton.
Australia and Switzerland have an in-force comprehensive Double Tax Agreement — the Convention between Australia and the Swiss Confederation for the Avoidance of Double Taxation with respect to Taxes on Income, signed 30 July 2013 and in force from 14 October 2014. Article 4 contains the standard OECD-pattern tie-breaker cascade: permanent home → centre of vital interests → habitual abode → nationality → mutual agreement procedure between the competent authorities. This is materially better than the Australia-to-Monaco case (no DTA) — if your residency is contested, you have a treaty-based argument and an MAP escape valve. The flip side: Switzerland is among the treaty partners that historically restrict full treaty access for forfait holders unless a “modified forfait” is elected for the relevant treaty income — meaning Australian-source income flows are taxed under ordinary Swiss rules to qualify for the treaty’s reduced withholding rates. Whether Australia is currently on the canton’s restricted list varies; verify in writing with the canton before assuming reduced AU withholding rates apply. CRS information exchange continues unaffected — both countries are CRS signatories and your Swiss bank balances are reported automatically to the ATO each year.
Step 5: First-year compliance in both jurisdictions
The departure-year Australian tax return is a part-year resident return covering worldwide income up to the date of cessation, the CGT Event I1 deemed disposal gains, plus any post-departure Australian-source income at non-resident rates (no tax-free threshold for non-residents — bracket starts at 32.5% from dollar one up to AUD $135,000, then 37%, then 45%). The section 104-165 election is made on this return and is permanent. After departure, Australian-source income — rental from retained Australian real estate, Australian-source dividends, interest, royalties — remains in the Australian net at non-resident rates. Under the AU-CH DTA, the statutory withholdings can drop materially: dividends to 5–15% depending on holding profile, interest to 10%, royalties to 5% — but only for treaty-eligible Swiss residents. Fully franked dividends remain exempt for non-residents but franking credits are not refundable.
Australian superannuation is not deemed-disposed under CGT Event I1. Super interests sit outside the ordinary CGT net; preservation rules continue, contributions cease when employment income ceases, and Australian citizens and PRs are not eligible for the Departing Australia Superannuation Payment (DASP) — DASP is restricted to former temporary visa holders. Leave the super untouched and plan a tax-efficient withdrawal at preservation age.
In Switzerland, you file an annual cantonal/federal tax return reflecting the negotiated forfait. The ruling is typically reviewed every 5 years or earlier if family size or expenditure pattern changes materially. Maintain a clean physical-days log — the ATO will request it first if your departure is reviewed.
Cost & Timeline
| Phase | Cost | Time |
|---|---|---|
| Tax planning + Australian/Swiss legal review (pre-move) | AUD $30,000–AUD $80,000 | 2–4 months |
| CGT Event I1 modelling, market valuations, section 104-165 analysis | AUD $15,000–AUD $40,000 | 1–3 months |
| Cantonal selection + forfait pre-ruling negotiation | CHF 50,000–CHF 250,000 | 3–6 months |
| Housing — long-term lease or property purchase | CHF 60,000–CHF 200,000+/yr rent or CHF 2–5M+ purchase | 2–6 months |
| Permit application (B-permit) + cantonal registration | Modest government fees + AUD $10,000–$25,000 advisory | 2–4 months |
| Move + setup (mandatory health insurance, utilities, schools) | CHF 30,000–CHF 100,000+ | 1–2 months |
| Departure-year Australian return + ongoing Swiss compliance | AUD $10,000–AUD $25,000 + CHF 30,000–CHF 80,000 | Annual |
| Annual all-in (tax + advisors + living) | CHF 600,000 – CHF 2M+ | Ongoing |
| Total year-1 advisory + setup (excl. property purchase) | AUD $150,000–AUD $400,000 | 6–12 months |
For a Sydney founder on AUD $5M of passive income, the post-move all-in tax savings (~AUD $1.2–1.8M/year) typically recover the entire year-1 setup advisory layer within the first six months — and the CGT savings on a major liquidity event can run into eight figures.
Treaty Considerations
The Australia-Switzerland DTA in force from 14 October 2014 is a modern, OECD-pattern treaty: dividend withholding caps of 5%/15% (5% for ≥10% participations, 15% otherwise), 10% on interest, 5% on royalties, an Article 4 tie-breaker cascade, and an MAP procedure. Compared with the no-treaty Australia-to-Monaco case, this gives Australians moving to Switzerland a meaningful safety net if the ATO contests residency.
The forfait introduces a wrinkle: several treaty partners — historically including France, Germany, Italy, Belgium, Norway, Austria and the US — restrict treaty benefits for Swiss lump-sum holders unless a “modified forfait” is elected, under which the relevant foreign-source income is taxed at ordinary Swiss rates rather than absorbed in the lump-sum bill. The canton then issues a treaty residency certificate covering that income. Whether Australia currently sits on the canton’s restricted list varies and changes; verify in writing with the cantonal tax administration before relying on the AU-CH DTA reduced withholdings, and structure Australian-source dividend, interest and royalty flows accordingly.
Common Mistakes
- Leaving the family in Australia while you live alone in Switzerland. A spouse and minor children remaining in an Australian dwelling are a near-fatal residential tie under the resides and domicile tests, and under Article 4 tie-breaker the “permanent home” and “centre of vital interests” both follow the family.
- Treating the Australian principal residence as “available” for visits. A house kept furnished, vacant, and ready for the family to return defeats the IT 2650 / Harding “permanent place of abode overseas” test. Either sell, or put it on a 12-month-plus arm’s-length lease.
- Ignoring crypto, private-company shares and foreign rentals in the CGT Event I1 calculation. Every non-TAP CGT asset is deemed-disposed at market value on the day of cessation — illiquidity is not a defence.
- Defaulting into the section 104-165 election by accident. The election is made by ticking a box on the return and is permanent. For most Australia-to-Switzerland forfait profiles, paying the departure tax with the 50% discount and not electing is the cleaner outcome.
- Trying to run an active business inside Switzerland under the forfait. The forfait requires no gainful employment in Switzerland. Running an operating company from Swiss territory collapses the regime — keep the business operationally outside Switzerland and serve only as shareholder/director.
- Ignoring the modified-forfait question. If Australia ends up on the canton’s restricted list, full treaty access on Australian-source income flows requires a modified forfait — which materially changes the tax cost. Get this resolved in the written ruling before moving.
FAQ
Will I still have to file in Australia after moving to Switzerland?
Yes, in two scenarios. (1) The departure-year Australian tax return covers worldwide income up to the date of cessation, the CGT Event I1 deemed disposal gains, the section 104-165 election if any, plus post-departure Australian-source income at non-resident rates. (2) Continuing Australian-source income — rental from retained Australian real estate (taxed at non-resident rates from the first dollar; no tax-free threshold), Australian-source business income, royalty income, and CGT on the eventual disposal of Taxable Australian Property — generally requires an annual non-resident return. The AU-CH DTA reduces withholding on most passive flows for treaty-eligible Swiss residents (5–15% on dividends, 10% on interest, 5% on royalties), subject to the modified-forfait question.
Can I keep my Australian bank account, super and property?
Yes to all three, with caveats. Banks reclassify the account as non-resident with 10% non-resident interest withholding (potentially reduced under the DTA). Australian super stays in place and remains tax-advantaged — preservation rules continue and citizens/PRs cannot use DASP. Australian real estate can be retained but the 50% CGT discount is denied on the portion of the gain accruing from 8 May 2012 onwards in non-resident periods, and the main residence exemption is largely denied to foreign residents under the post-30 June 2020 rules — selling the principal residence before departure typically preserves the exemption.
What’s the minimum amount of capital I need to commit?
The forfait has no formal asset threshold, but cantons require demonstrable means and the cantonal minimum tax in Geneva/Vaud effectively sets total minimum tax around CHF 450,000–600,000+ per year; central-Switzerland cantons can be lower. Plus housing (long-term lease at CHF 60,000–200,000+/yr or property purchase from CHF 2M+), mandatory health insurance, and one-time legal/advisory costs of CHF 50,000–250,000. Realistically the regime is economic only if your annual passive income comfortably exceeds CHF 5M+ — below that, Italy’s €200K flat tax or Greece’s €100K non-dom is usually a better fit.
What if the ATO disputes my departure?
The dispute begins with a query on the departure-year return, can escalate to a residency review, objection, the AAT and the Federal Court. Crucially, the AU-CH DTA gives you Article 4 tie-breaker arguments and an MAP procedure — materially better than the no-treaty Monaco case. Cases like Harding turn on contemporaneous evidence of a permanent overseas home: the Swiss permit, registered cantonal forfait ruling, lease or title deed, Swiss bank statements, mandatory health insurance, family relocation, school enrolments and a clean physical-days log are the spine of the file.
Does Switzerland tax my crypto holdings?
For Swiss private investors outside the lump-sum regime, Switzerland taxes crypto as wealth (cantonal wealth tax on year-end value) but generally not as income or capital gains on private holdings, provided the holder isn’t a “professional securities dealer” under the SFTA’s five-criteria test. Under the forfait, the wealth aspect is absorbed into the imputed expenditure calculation. Mining, staking-as-business, or pro-trader profile changes the analysis materially.
How does this compare to Australia-to-Monaco or Australia-to-UAE?
Three different shapes. Australia to Monaco is a true 0% destination but with no DTA — residency is decided on Australian domestic law alone, and entry costs €1–2M. Australia to UAE is also 0% with no DTA (similar evidentiary risk) and is dramatically cheaper to enter. Switzerland trades headline tax rate for predictability, an in-force AU-CH DTA, world-class banking, AAA stability and a route to a Swiss passport after ~10 years — economics work above CHF 5M+ in annual passive income. See Monaco vs Switzerland for ultra-HNW families weighing pure 0% against a Swiss negotiation.
Can I move back to Australia later?
Yes. There is no minimum non-residence period. If you re-establish residency under any of the four tests, you become Australian-resident again on that date, with a new acquisition cost equal to fair market value on the day of becoming resident for assets previously deemed-disposed under CGT Event I1 (under the corresponding section 855-45 step-up). Assets in respect of which you elected under section 104-165 retain their original cost base on re-entry. Most cross-border advisors recommend a minimum 3–5-year non-residence horizon to avoid ATO arguments that the departure was not “genuine”.
Next Step
For the full destination-side breakdown — eligible cantons, the standard versus modified forfait, the B-permit-to-citizenship pathway and inheritance-tax planning by canton — see Tax-Free Residency in Switzerland. For the Australian-side machinery — CGT Event I1, section 104-165 election, the IT 2650 framework and Harding — see How to Legally Exit a High-Tax Country. To compare against alternatives, see Australia to Monaco (true 0%, no DTA) and Monaco vs Switzerland.
Book a free consultation — we specialise in Australia-to-Switzerland relocations and run CGT Event I1 modelling, section 104-165 election analysis, cantonal forfait pre-ruling negotiation and B-permit project management in parallel.
Last updated: 2026-04-27
Sources:
– Australian Taxation Office — Residency tests for tax purposes and Taxation Ruling IT 2650 Income tax: residency – permanent place of abode outside Australia — https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency
– Australian Taxation Office — CGT and changing residency (CGT Event I1, section 104-160 / 104-165 election) — https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/foreign-residents-and-capital-gains-tax/changing-residency
– Harding v Commissioner of Taxation [2019] FCAFC 29 — Federal Court of Australia, permanent place of abode test
– Australian Treasury — Convention between Australia and the Swiss Confederation for the Avoidance of Double Taxation with respect to Taxes on Income (signed 2013, in force 14 Oct 2014) — https://treasury.gov.au/tax-treaties
– Swiss Federal Tax Administration (ESTV/AFC) — Lump-sum taxation overview — https://www.estv.admin.ch/
– PwC Worldwide Tax Summaries — Australia and Switzerland individual taxation — https://taxsummaries.pwc.com