16 South-East Part of Switzerland Relocation to and working in the south-east part of Switzerland This document contains general information on various topics regarding the automatic exchange of information and the Common Reporting Standard (CRS) that may be of interest for Swiss and foreign financial institutions (FI) and individuals. For individual, case related information and enquiries, please contact one of our Swiss CRS specialists. FOB & PW SWITZERLAND Language Regions in Switzerland SH BS TG ZH BL AG JU AR AI SO ZG SG LU SZ NE NW GL BE OW FR GR UR GR GR VD TI GE VS German-speaking French-speaking Italian-speaking Rhaeto-Romanic-speaking Loyens & Loeff – FOB & PW – Zurich – December 2020 – General information 2 South-East Part of Switzerland – Taxation Overview (1/2) Ticino Graubünden Lugano Chur Distance to (in km) Zurich 210 120 Geneva 370 400 Next Airport International Lugano (approx. 20 min.) Zurich (approx. 90 min.) Private Lugano (approx. 20 min.) Samedan (approx. 60 min.) Ordinary taxation (not married; no children; w/o church tax; tax rates 2020) Income tax 38.0% 32.2% (top income tax rate; approx.) Wealth tax 0.44% 0.32% (top net wealth tax rate; approx.) Loyens & Loeff – FOB & PW – Zurich – December 2020 – General information 3 South-East Part of Switzerland – Taxation Overview (2/2) Ticino Graubünden Lump-sum taxation Lump-sum taxation requires advance tax ruling confirmation by competent cantonal tax authorities whereby EU-citizen full disclosure of all relevant facts and worldwide income / wealth position is required. Income and wealth tax basis for lump-sum taxation is subject to negotiation with competent cantonal tax authorities and depends on the facts of the case, inter alia effective worldwide income and net wealth. Income i) CHF 400k EU/EFTA i) CHF 400k EU/EFTA Minimum cantonal assessment CHF 750k non-EU/EFTA CHF - non-EU/EFTA basis ii) 7 times ii) 7 times iii) 3 times iii) 3 times Wealth 5x assessment basis for income, i.e. 20x assessment basis for income, i.e. Minimum cantonal assessment CHF 2m EU/EFTA and CHF 8m EU/EFTA and basis CHF 3.75m non-EU/EFTA CHF - non-EU/EFTA Minimum annual tax basis approx. CHF 140k EU/EFTA approx. CHF 145k EU/EFTA (approx.) and CHF 240k non-EU/EFTA and between CHF 200k and CHF 1m non-EU/EFTA (depending on municipality) i) Minimum amount ii) Annual housing costs (annual rental costs or rental value) iii) Pension fee for accommodation and catering Loyens & Loeff – FOB & PW – Zurich – December 2020 – General information 4 South-East Part of Switzerland – Cross-Border Commuters Italy / Switzerland • Taxation of cross-border commuters is based on the agreement between Switzerland and Italy dated 3rd October 1974 (the Agreement) • The Agreement applies (a) unilaterally to individuals who are domiciled in Italy and work in Switzerland and (b) on the Swiss side only to the cantons of Grisons, Ticino and Valais • No definition of cross-border commuters; in principle, a regular return to country of residence is required • According to the Agreement, income from cross-border employment is only taxed in the state in which the (salaried) employment is carried out (i.e. Switzerland) • Taxation at source in Switzerland (special cantonal WHT tariff “F”) • Switzerland is required to pay a financial compensation to Italy of 40% of the gross amount of taxes levied by the cantons concerned (i.e. Grisons, Ticino and Valais) on the remunerations paid to cross-border commuters Loyens & Loeff – FOB & PW – Zurich – December 2020 – General information 5 South-East Part of Switzerland – Other Aspects Swiss migration law ➢ Reporting procedure for max. 90 days of work in CH ➢ Residence permit (“B-Bewilligung”), valid for 5 years, extendable ➢ Work permit Housing ➢ No restrictions for purchase/construction of residential property by Swiss resident EU/EFTA citizens ➢ Authorization required for non-Swiss resident EU/EFTA citizens and third state citizens ➢ General restriction for purchase/construction of second homes Swiss social security ➢ Mandatory health and accident insurance ➢ Pillar system (pillars 1 to 3) Swiss gift and inheritance tax ➢ In general no gift and inheritance taxes on transfer to spouses and children ➢ Other parties: up to 55% depending on canton and relationship to receiving party Loyens & Loeff – FOB & PW – Zurich – December 2020 – General information 6 Disclaimer This publication does not constitute tax or legal advice and the contents thereof may not be relied upon. Although this publication was composed with the greatest possible diligence, all entities, branch offices, partnerships, persons and practices trading under the name “Loyens & Loeff” cannot accept liability or responsibility for the results of any actions taken on the basis of this publication without their cooperation, including any errors or omissions. Loyens & Loeff – FOB & PW – Zurich – December 2020 – General information 7.