SWITZERLAND: An Introduction
The Economic Situation in Switzerland in 2025
In difficult political and economic times, Switzerland and the Swiss economy remain resilient and attractive for investment.
The Swiss National Bank (SNB) recently cut its key interest rate to 0.00% because of the strong Swiss franc. However, there is robust economic growth, and the real estate market remains strong, providing stable and safe grounds for investments.
New Swiss inheritance law provisions in force since 1 January 2023: a review
The revised inheritance law revision, which came into force on 1 January 2023, modernises and liberalises the Swiss inheritance law, with a reduction in the compulsory portions for descendants and the abolishment of the compulsory portions for parents. Now, more than two and a half years later, sufficient time has passed to perform an initial review of the new provisions. In general, the experience has been positive. The greater testamentary freedom enables clients to plan more freely and helps them implement their wishes better. However, older cases, where the planning was completed prior to the revision of the provisions, had to be revisited. In particular, this meant that last wills and inheritance contracts had to be checked and amended on the basis of the new legislation to prevent any gaps or mismatch between the previous provisions on inheritance law and the revised provisions, all in accordance with the wishes of the planning testator.
New international inheritance law revision: provisions in force since 1 January 2025
Since 1 January 2025, new provisions have been in place regarding international inheritance matters. The new provisions will reduce the risk of conflict regarding jurisdiction between authorities in Switzerland and abroad, as well as reduce the risk of conflicting decisions among jurisdictions. For example, people who own assets in Switzerland and abroad will have more planning options regarding their estate. Swiss citizens with dual nationality can now choose the inheritance law of their other nationality, enhancing flexibility for international estate planning, though Swiss forced heirship rules still apply. This has led many clients to review and adjust their estate planning.
Swiss foundations (family and charitable)
For years, the Swiss Parliament debated the introduction of a family trust. The proposal has now been definitively rejected. The motion in favour of strengthening the family foundation was adopted by Parliament. The maintenance foundation is not permitted in Switzerland. However, this is no longer considered appropriate, and the federal council has now been tasked by Parliament to draft the appropriate legislation to implement the proposed strengthening of the family foundation.
At the beginning of 2024, the Zurich Cantonal Tax Office adjusted its practice regarding tax exemption for charitable organisations in response to a revision of foundation law. Appropriate compensation for the governing bodies of charitable legal entities (in particular foundations) no longer prevents them from being granted tax exemption. In addition, charitable activities abroad are generally measured according to the same standards as activities in Switzerland.
Strengthening the fight against money laundering/transparency register
The introduction of a federal register (transparency register), on which companies and other legal entities must enter their beneficial owners, is currently under parliamentary discussion, and a proposed draft legislation was submitted to Parliament on 22 May 2024. The register is intended to make it easier for law enforcement to determine the person(s) behind a legal structure. The register will not be publicly accessible, and a simplified reporting procedure will be provided for associations and foundations.
In future, due diligence obligations under the money laundering legislation will apply to the exercise of certain advisory activities (in particular legal advice) that involve an increased risk of money laundering. A self-regulatory organisation (SRO) will be responsible for supervising the exercise of due diligence.
Further measures are planned in the proposed draft of the legislation to prevent the circumvention or violation of sanctions under the Embargo Act. For example, special due diligence obligations with respect to precious metals trading for cash payments of CHF15,000 or more have been proposed.
A new inheritance tax initiative
The Young Socialists Party (Jungsozialist*innen Schweiz; JUSO) has launched a popular social climate policy financed fairly through taxation (“Initiative for a Future”). This inheritance tax initiative calls for an inheritance and gift tax of 50% for persons who bequeath or give away more than CHF50 million. This means that a one-off allowance of CHF50 million would apply, and cantonal inheritance and gift taxes would continue to exist in parallel. Thematically, the initiative corresponds to the European citizens’ “Tax the Rich” initiative.
On 15 May 2024, the Federal Council of the Swiss government recommended rejecting the initiative, without presenting a direct alternative or indirect counter-proposal. All major parties in Switzerland, as well as business representatives, have also dedicated themselves to opposing the initiative. In parliamentary consultations, both the National Council and the Council of States have clearly rejected the initiative. The popular vote is expected to take place on 30 November 2025.
Taxation changes for natural persons
In 2024, the VAT rate increased from 7.7% to 8.1%. Regarding income tax for individuals, rates remained stable in 2024.
Most cantons in Switzerland offer the option for non-Swiss nationals who come to live in Switzerland for the first time (or after an absence of ten years) – and who will not be gainfully active in Switzerland – to pay taxes under the lump-sum taxation regime, opening up interesting planning possibilities for wealth owners.
Instead of paying taxes on actual income and assets, the basis of taxation is calculated according to living expenses. The concrete terms of any lump-sum arrangement are subject to negotiations with the relevant cantonal tax authority. Pre-immigration tax planning is thus essential.
Extension of the AEOI regarding crypto-assets
On 19 February 2025, the Federal Council submitted a dispatch to Parliament proposing extending the international automatic exchange of information (AEOI) in tax matters. Set to apply from 1 January 2026, the extension concerns AEOI with regard to crypto-assets, and an amendment of the standard for the AEOI in respect of financial accounts.
In October 2022, the OECD published an updated common reporting and due diligence standard for financial account information (collectively, the CRS), and the new Crypto-Asset Reporting Framework (CARF). While the amendments to the CRS clarify interpretation issues and take practical experience into account, CARF regulates the handling of crypto-assets and their providers. Subject to parliamentary approval, Switzerland intends to implement CARF. This is intended to close gaps in the tax transparency mechanism and ensure equal treatment with respect to traditional assets and financial institutions.