Global Citizens, Non-Dom Residents and New Residents

Switzerland continues to be a particularly attractive destination for wealthy taxpayers thanks to its advantageous tax regime, especially when compared to that of the United Kingdom and Italy. Let's look at the main differences between the three countries:

Switzerland
Switzerland offers a flat-rate tax regime for so-called "globalists", or wealthy new residents, who do not exercise a gainful activity in the territory. This system is based on taxation according to expenditure, that is, on the basis of the maintenance costs and standard of living of the taxpayer and his or her dependents. This mechanism was introduced to facilitate taxation for those who move their residence to Switzerland while keeping their assets abroad.

One of the main advantages of taxation in Switzerland is the possibility of reducing the tax burden through the use of this taxation system based on expenditure, avoiding taxation on foreign-source income that is not repatriated. The system attracts many wealthy new residents who can enjoy significant tax benefits while maintaining a low effective tax rate.

United Kingdom
Until recently, the UK offered a particularly advantageous system for residents but not domiciled (res non-dom), allowing them to pay tax only on domestic income or on foreign income only if repatriated. However, in 2024, the res non-dom regime was abolished and replaced by new provisions. This makes the country less attractive to those who previously enjoyed reduced taxation on foreign income. However, for a transitional period, there will be exemptions on foreign-source income and capital gains.

The abolition of the res non-dom regime is expected to increase tax revenues, but this may reduce the appeal for wealthy taxpayers who may find other jurisdictions, such as Switzerland, more advantageous.

Italy
Italy introduced a special tax regime for new residents in 2017, similar to the Swiss one, but with some significant differences. Those who transfer their tax residence to Italy can opt to pay a substitute tax of €100,000 per year on foreign income, regardless of the actual amount of income generated. In 2024, however, this tax was increased to €200,000 for new residents, making the regime less advantageous.

This Italian regime is valid for 15 years and provides that foreign-source income is not subject to ordinary tax or reporting obligations, significantly reducing the tax complexity for new residents. Additionally, taxpayers can extend the regime to their family members, paying a reduced tax of €25,000 for each of them.

Wealthy taxpayers continue to look to Switzerland as one of the most favorable tax jurisdictions for managing their wealth, thanks to a streamlined and competitive tax system.