Drawing on new archival sources and quantitative data, we analyse the emergence, expansion, and resilience of Switzerland’s expenditure-based taxation schemes (forfait fiscal/Pauschalbesteuerung) which have allowed wealthy non-working foreign residents to be taxed based on estimated living expenses rather than income or wealth like ordinary taxpayers. The article reveals how these tax schemes, first introduced in the early 20th century, became deeply embedded in cantonal tax systems, despite repeated criticism from federal authorities and the international community. Intermediaries – including lawyers, notaries, and bankers – played a key role in facilitating the domiciliation of these wealthy foreigners. In fact, the aim of these expenditure-based taxation schemes was not to generate tax revenues but to boost high-end sedentary tourism and wealth management services. By focusing on individual rather than corporate tax planning, this article offers a fresh perspective on Switzerland’s role as a tax haven. It sheds light on the legal, political, and professional networks that sustain tax privileges and raises broader questions about tax justice, federalism, and the governance of international wealth.
Giddey et al. (2025) studied this question.