How to avoid wealth tax in Switzerland?

[Blockvol]

Hello,

I hesitate to move to Switzerland, on the French or Italian side, because all the criteria suit me except one... Wealth tax!

I calculated that in Geneva I will have to pay 300k€/year, and in Lugano "only" 130k€/year. I tried to do the calculations with the lump-sum tax but it doesn't help me at all because I don't work, but live only thanks to a capital (entirely in Bitcoin).

Apart from minimizing my fortune (Bitcoins are easy to hide) to only €2m (in case Bitcoin continues to rise) and paying only €8,000/year, I don't see how to avoid it, and it's going to be a problem for me if I want to buy a home for €4m for exemple : where will my difference come from? The State would quickly understand the attempt at concealment...

I've heard that the Swiss may be able to deduct their debts from their wealth, but how do you get into debt to the tune of tens of millions of euros?! In addition, I will be forced to leave my Bitcoins as collateral at the bank and therefore will be at their mercy...

If you have any ideas, thank you in advance!

 

[Martin Everson]

I've heard that the Swiss may be able to deduct their debts from their wealth, but how do you get into debt to the tune of tens of millions of euros?! In addition, I will be forced to leave my Bitcoins as collateral at the bank and therefore will be at their mercy...

You guessed it right. Use your assets as collateral for a substantial loan. And problem with collateral is the bank can reduce the LTV value of your collateral overnight and shaft you with a margin call as I once experienced.

P.S Bitcoin as collateral is suicide for a lender - although there is Salt Lending etc. I personally would not offer an LTV of more than 10% against it.

 

[Blockvol]

You guessed it right. Use your assets as collateral for a substantial loan. And problem with collateral is the bank can reduce the LTV value of your collateral overnight and shaft you with a margin call as I once experienced.

P.S Bitcoin as collateral is suicide for a lender - although there is Salt Lending etc. I personally would not offer an LTV of more than 10% against it.

As you say, it's not really possible for me... and I'm too afraid of margin call, Bitcoin is too volatile.

There is no other possibilities ? Trusts are taxed like people ?

 

[clemens]

Poland and Germany may be better spots.

 

[Blockvol]

Poland and Germany may be better spots.

Not for me !

 

[Martin Everson]

There is no other possibilities ?

What about Andorra?

Trusts are taxed like people ?

In some countries yes.

 

[JackAlabama]

Hello,

I hesitate to move to Switzerland, on the French or Italian side, because all the criteria suit me except one... Wealth tax!

I calculated that in Geneva I will have to pay 300k€/year, and in Lugano "only" 130k€/year. I tried to do the calculations with the lump-sum tax but it doesn't help me at all because I don't work, but live only thanks to a capital (entirely in Bitcoin).

Apart from minimizing my fortune (Bitcoins are easy to hide) to only €2m (in case Bitcoin continues to rise) and paying only €8,000/year, I don't see how to avoid it, and it's going to be a problem for me if I want to buy a home for €4m for exemple : where will my difference come from? The State would quickly understand the attempt at concealment...

I've heard that the Swiss may be able to deduct their debts from their wealth, but how do you get into debt to the tune of tens of millions of euros?! In addition, I will be forced to leave my Bitcoins as collateral at the bank and therefore will be at their mercy...

If you have any ideas, thank you in advance!

Whats the exact issue with the lump sum tax especially since you are retired.

Lump sum tax will not take into account your wealth and income but only your living costs which will determine the tax bill. You will need good advisors who can help you negotiate the amount with the tax office of the canton of interest.

 

[denniz07]

Are they even able to see all your crypto assets? I mean how does it even work? By the way if you are already trading actively then, you might get even more taxes in swiss. Actually in a similar situation as you are.

 

[JackAlabama]

Are they even able to see all your crypto assets? I mean how does it even work? By the way if you are already trading actively then, you might get even more taxes in swiss. Actually in a similar situation as you are.

Not so easily yes but they can figure this out over time since your lifestyle probably will not match at all your declared assets and people will chat about you if you drive around in not-leased a Ferrari but claim to make 10k/ year and then it goes downhill from there

 

[denniz07]

I mean if something like AEOI comes for crypto, then it would be very easy of course. Also as said just as a warning. Not sure right now how much data the exchanges give out. I think there are really a lot of people who are not declaring right now. Guess I will

 

[Konstanz]

For such capital Monaco could be an option, no income tax.

 

[Blockvol]

What about Andorra?

Above all, I am looking for a very rich country, with a mild climate (like italian side of Switzerland). And if possible big enough to avoid going to a neighboring country of the EU... except Monaco because it is really worth it on these two points!

Whats the exact issue with the lump sum tax especially since you are retired.

Lump sum tax will not take into account your wealth and income but only your living costs which will determine the tax bill. You will need good advisors who can help you negotiate the amount with the tax office of the canton of interest.

I will most likely have an annual rent of 100k€, so my lump sum will be calculated on the basis of an income equivalent to 7 times this amount, which would make me pay 80k€ in federal tax! It's almost as much as declaring my entire wealth and paying 130k€ in taxes...

I mean if something like AEOI comes for crypto, then it would be very easy of course. Also as said just as a warning. Not sure right now how much data the exchanges give out. I think there are really a lot of people who are not declaring right now. Guess I will

Sorry I don't have my sources anymore, but it's being drafted in EU.

Are they even able to see all your crypto assets? I mean how does it even work? By the way if you are already trading actively then, you might get even more taxes in swiss. Actually in a similar situation as you are.

Soon thanks to the AEOI, CRS or equivalent, or simply in the event of a tax audit. For exemple in France we are forced to declare our exchange accounts as foreign bank accounts. The French State does not hesitate to ask exchanges for information about you. It is likely that they will then analyze your activities on the blockchain if you have not thought of mixing your tokens.

Since trusts don't seem to work (apart from the "discretionary and irrevocable" one, but I don't want to dispossess myself of my own assets), why not declare just 1 million euros and vary the amount by year after year as I see fit? After all, my crypto wallet is 100% opaque! I will only have to pay 3500€ per year, against 130k€ initially!

For such capital Monaco could be an option, no income tax.

I have no income, and here I am only talking about wealth tax.

But yes, Monaco would be perfect without defrauding, but Switzerland with a little fraud, which is very hard to prove, would be fiscally equivalent. But it's too difficult because privates bankers doesn't seems to like people who make wealth thanks to Bitcoin... I'm too suspect for them..

 

[denniz07]

I have no income, and here I am only talking about wealth tax.

But yes, Monaco would be perfect without defrauding, but Switzerland with a little fraud, which is very hard to prove, would be fiscally equivalent.

That was my thought as well about Switzerland... really not sure if how strong they go after you. In Germany it is risky. There are whole organization to fight fraud. As far as I know it doesn't exists in Switzerland (Steuerfahndung) but of course Authorities might also be able to ask data from exchanges or whatever (I have no idea)

But it's too difficult because privates bankers doesn't seems to like people who make wealth thanks to Bitcoin... I'm too suspect for them..

Just as remark for you. I though will go to Switzerland and it would be easy to cash out. BUT also here Banks ask a lot of questions. Some wouldn't open an account without a Tax declaration. In the end I found some crypto banks that worked well, and didn't aks to many questions, but it was not straight forward.

 

[ImKing]

crypto banks that worked well, and didn't aks to many questions, but it was not straight forward.

what banks are they?

 

[Blockvol]

That was my thought as well about Switzerland... really not sure if how strong they go after you. In Germany it is risky. There are whole organization to fight fraud. As far as I know it doesn't exists in Switzerland (Steuerfahndung) but of course Authorities might also be able to ask data from exchanges or whatever (I have no idea)

Germany looks worse than France for making requests to Kraken for example, but Switzerland does worse than France proportionally to the number of inhabitants.

Either way, this kind of request won't necessarily reveal someone's entire crypto wealth, whether they've traded DeFI, bought it on a DEX, or otherwise obtained it. Or at worst if he bought them on an exchange known as Kraken, then mixed them, and after a few years, maybe he spent them in the meantime? They can't know everything.

Just as remark for you. I though will go to Switzerland and it would be easy to cash out. BUT also here Banks ask a lot of questions. Some wouldn't open an account without a Tax declaration. In the end I found some crypto banks that worked well, and didn't aks to many questions, but it was not straight forward.

A tax declaration from your last residence of another country ? Why could this be a problem, and why they need this ?

Could you give me names of Swiss banks please, even in pm?

A tax declaration from your last residence of another country ? Why could this be a problem, and why they need this ?

I'm tired, sorry... Of course it will be a problem if I cheat on my wealth tax, and that to the banker of the next country where I will move I will have to explain to him that I lied...

 

[denniz07]

A tax declaration from your last residence of another country ? Why could this be a problem, and why they need this ?

Yes they kind of said we want to make sure that the money is clean. I even provided some documents from lawyers that explains it. BUT they wanted a tax declaration.
Some brokers wanted every crypto transaction as proof..

Could you give me names of Swiss banks please, even in pm?

Sure. Write me a pm and I will answer.

 

[backpacker]

I tried to do the calculations with the lump-sum tax but it doesn't help me at all because I don't work, but live only thanks to a capital (entirely in Bitcoin).

Above all, I am looking for a very rich country, with a mild climate (like italian side of Switzerland).

Weird.
Someone claims to be very rich but is unwilling to pay comparatively low taxes for the privilege of living in "a very rich country"

So, you already evaluated Ticino. Since you do not like the Swiss version of Lombardia with its relatively convoluted tax- and fee system, why not live in Lombardia itself. It is cheaper (also taxwise) and you are with the Wealthy of the World.
Search around Lago di Como and you will find a very elitist lifestyle.
Taxes: I am sure you heard of Italian lump sum taxation. Just pay the annual "membership fee" - easiest system ever.

 

[JackAlabama]

Germany looks worse than France for making requests to Kraken for example, but Switzerland does worse than France proportionally to the number of inhabitants.

Either way, this kind of request won't necessarily reveal someone's entire crypto wealth, whether they've traded DeFI, bought it on a DEX, or otherwise obtained it. Or at worst if he bought them on an exchange known as Kraken, then mixed them, and after a few years, maybe he spent them in the meantime? They can't know everything.

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A tax declaration from your last residence of another country ? Why could this be a problem, and why they need this ?

Could you give me names of Swiss banks please, even in pm?



I'm tired, sorry... Of course it will be a problem if I cheat on my wealth tax, and that to the banker of the next country where I will move I will have to explain to him that I lied...

Think of Switzerland as Germany-light. It is nothing what it was 20 years ago. And they also do enforcements etc. just the soft "brave new world" style whereas Germany tends to pull out the big guns and runs harsher "1984" methods.
The outcome is similar tho.

 

[Blockvol]

Yes they kind of said we want to make sure that the money is clean. I even provided some documents from lawyers that explains it. BUT they wanted a tax declaration.
Some brokers wanted every crypto transaction as proof..

I too had a document authenticated by a bailiff, but I don't know if that will be enough...

I have no trace of my transactions because I had not considered having to come into the traditional banking system one day! The private banker I spoke to on the phone even teased me that it's fine to be outside the banking system, but it only lasts for a while...

Sure. Write me a pm and I will answer.

I can't, thank you if you can post them here, if not too bad.

Weird.
Someone claims to be very rich but is unwilling to pay comparatively low taxes for the privilege of living in "a very rich country"

So, you already evaluated Ticino. Since you do not like the Swiss version of Lombardia with its relatively convoluted tax- and fee system, why not live in Lombardia itself. It is cheaper (also taxwise) and you are with the Wealthy of the World.
Search around Lago di Como and you will find a very elitist lifestyle.
Taxes: I am sure you heard of Italian lump sum taxation. Just pay the annual "membership fee" - easiest system ever.

It's not weird.

The "annual membership fee" that is the lump sum is not prestigious.

1/ My wealth is new and I don't go crazy with it, because it's my only source of passive income, so the less I touch it, the more important it remains, and the more I earn. I spend a total of around €6k/month, so paying €100k/year in lump sum seems crazy in comparison! I'm waiting for Bitcoin to pass 100k€ and to be expatriated to splurge.

2/ We know very well where your taxes are: in the pockets of friends/clients/bureaucrats of the State, which deprives us more and more of everything, and gives us back less and less.

3/ Paying a wealth tax means telling states how much I own, lump sum is better but implies that I'm ultra-wealthy. Knowing that the world economy has started to collapse because of the energy peak, the States (with the help of the UE) will continue to take away our wealth and power over this wealth (ie our freedoms) as @JackAlabama says below top for Switzerland. I don't want to be stuck like a Jew when everything collapses and the jealous leftists go to the rich to rob them.

4a/ I can't go to Lombardy because Italy wants to steal 26% of my entire assets (26% tax on capital gains, which in my case is 100%). I have a very easy method to reset my gains to 0 by expatriating to Italy from France, but as soon as the Bitcoin will only be a simple x3, the tax will already recover 17.3% and I won't be able to use this method anymore, so I'll be trapped.

4b/ I can't stay in my country France because even without wealth tax, here it's 30% they want to steal from me, and soon an exit tax will prevent me from fleeing without paying them in full. Another trap.

 

[JackAlabama]

I too had a document authenticated by a bailiff, but I don't know if that will be enough...

I have no trace of my transactions because I had not considered having to come into the traditional banking system one day! The private banker I spoke to on the phone even teased me that it's fine to be outside the banking system, but it only lasts for a while...



I can't, thank you if you can post them here, if not too bad.



It's not weird.

The "annual membership fee" that is the lump sum is not prestigious.

1/ My wealth is new and I don't go crazy with it, because it's my only source of passive income, so the less I touch it, the more important it remains, and the more I earn. I spend a total of around €6k/month, so paying €100k/year in lump sum seems crazy in comparison! I'm waiting for Bitcoin to pass 100k€ and to be expatriated to splurge.

2/ We know very well where your taxes are: in the pockets of friends/clients/bureaucrats of the State, which deprives us more and more of everything, and gives us back less and less.

3/ Paying a wealth tax means telling states how much I own, lump sum is better but implies that I'm ultra-wealthy. Knowing that the world economy has started to collapse because of the energy peak, the States will continue to take away our wealth and power over this wealth (ie our freedoms) as @JackAlabama says below top for Switzerland. I don't want to be stuck like a Jew when everything collapses and the jealous leftists go to the rich to rob them.

4a/ I can't go to Lombardy because Italy wants to steal 26% of my entire assets (26% tax on capital gains, which in my case is 100%). I have a very easy method to reset my gains to 0 by expatriating to Italy from France, but as soon as the Bitcoin will only be a simple x3, the tax will already recover 17.3% and I won't be able to use this method anymore, so I'll be trapped.

4b/ I can't stay in my country France because even without wealth tax, here it's 30% they want to steal from me, and soon an exit tax will prevent me from fleeing without paying them in full. Another trap.

What are you talking to private bankers on the phone and telling them your situation? It is like talking to a used car salesman lol
And why do you want to get into the banking system so desperately right now, what has changed?