Ticino's taxes on wealthy residents

Taxation according to expenditure in Ticino

Chapter B.II has explained the federal framework of taxation according to expenditure (imposizione secondo il dispendio). It covered the conditions of Art. 14 of the Federal Act on Direct Federal Taxation (DBG, SR 642.11) and Art. 6 of the Federal Act on the Harmonization of Direct Taxes (StHG, SR 642.14), the federal minimum base of CHF 400,000 from 2016 with its adjustment for inflation, the rule that the base must be at least seven times the rental value of the taxpayer's home and the control calculation. Ticino applies the regime at cantonal and communal level under Art. 13 LT. Its cantonal minimum base was set at CHF 400,000 and is indexed to inflation like the federal minimum. For the 2024 tax period the minimum stood at CHF 429,100. The Council of State fixes the minimum for each tax period by separate decree, and the cantonal regulation of 1994 bases the calculation on the annual expenditure needed to maintain the standard of living of the taxpayer and of the dependants living in Switzerland.¹ Taxpayers whose actual worldwide expenditure, or seven times their rental value, exceeds the minimum are taxed on the higher figure.

Ticino has kept the regime through several political challenges. When the Grand Council rejected a parliamentary initiative to abolish it by 56 votes to 20, with 3 abstentions, the Greens announced an initiative to double the minimum base to CHF 800,000.² Two further initiatives followed, one of 19 October 2020 to abolish the regime and one of 22 May 2023 to raise the minimum to CHF 800,000. A minority report of the Finance Committee of 17 November 2023 recommended their approval and pointed to Zurich's abolition of the regime in 2009 "without significant fiscal losses".³ The regime nevertheless remained in force, with the cantonal tax administration continuing to report its results.

In figures. Ticino counted 877 taxpayers under the expenditure regime in 2012, when they paid about CHF 30 million in cantonal and CHF 23 million in communal taxes.⁴ Their number fell to 767 at the end of 2022 and to 725 at the end of 2024, while the cantonal and communal revenue they paid rose by CHF 6 million between 2022 and 2024. According to the director of the cantonal tax division, the decline reflected moves to ordinary taxation, departures to other cantons or abroad and deaths, partly offset by several dozen new arrivals.⁵

Lump-sum taxation and the Italian treaty

For an Italian national taxed according to expenditure in Lugano, the double taxation convention with Italy imposes an additional condition. The conventions with Germany, Austria, Italy and Belgium do not treat persons taxed on the classical lumpsum basis as residents of Switzerland. Such persons cannot claim the reduced withholding taxes and other benefits of the convention for income from those states. In the Italian convention the rule is found in Art. 4(5)(b), under which a natural person who is not taxed in the state of residence on all the income generally taxable under its law does not count as a resident.⁶ To obtain treaty protection the taxpayer must accept the so-called modified lump-sum taxation, under which all income from Italian sources is included in the Swiss assessment and taxed at the ordinary rates. In practice this makes the regime unattractive for Italians whose main income consists of dividends from an Italian family company, Italian rents or Italian pensions. The regime suits mainly families whose income comes from investments managed outside Italy and who have no significant Italian-source income.

The lump-sum taxpayer must also refrain from gainful activity in Switzerland. Managing one's own assets is permitted, but sitting on the board of a Swiss company or working for a Swiss employer is not. Italian entrepreneurs who continue to manage the family company from Lugano are excluded from the regime. If the management is effectively exercised in Switzerland, they may also create risks for the Italian company, since the Italian authorities may consider that its place of effective management has moved abroad, or conversely that the entrepreneur never left Italy. Chapter H.II treats these questions of corporate residence.

Notes

1. RSI, "Ticino: meno globalisti ma più entrate fiscali nel 2024", 26 September 2025, https://www.rsi.ch/info/ticino-grigioni-e-insubria/Ticino-meno-globalisti-ma-pi%C3%B9-entrate-fiscali-nel-2024--3147723.html (consulted 5 October 2026); Gran Consiglio del Cantone Ticino, Commissione della gestione e delle finanze, minority report on the parliamentary initiatives IE 593 and IE 738, 17 November 2023 (rapporteur Ivo Durisch), https://www4.ti.ch/fileadmin/POTERI/GC/allegati/rapporti/28128_IE%20593%20IE %20738%20R-min.pdf (consulted 5 October 2026), on the cantonal minimum of CHF 400,000. Regolamento della legge tributaria (RLT) of 18 October 1994, Art. 1, implementing Art. 13 LT, Lexfind, https://lexfind.ch/tolv/119184/it (consulted 5 October 2026): the minimum is fixed "per ogni periodo fiscale dal Consiglio di Stato con decreto separato". ↩
2. RSI, "Globalisti, non si cambia", https://www.rsi.ch/info/ticino-grigioni-e-insubria/Globalisti-non-si-cambia--804338.html (consulted 5 October 2026). Date of the vote. ↩
3. Minority report of 17 November 2023 (above). Outcome of the Grand Council's vote. ↩
4. RSI, "Globalisti, non si cambia" (above). ↩
5. RSI, "Ticino: meno globalisti ma più entrate fiscali nel 2024" (above), quoting Giordano Macchi, director of the Divisione delle contribuzioni. ↩
6. Law.ch, "Pauschalsteuern: Steuerbemessung", https://law.ch/lawinfo/pauschalsteuern/steuerbemessung/ (consulted 5 October 2026). Swiss-Italian convention (above), Art. 4(5)(b), Droit-bilingue.ch, https://www.droit-bilingue.ch/de-it/0.6/0.67/0.672.945.41-4-7.html (consulted 5 October 2026). ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.