What a lump sum tax is
A lump sum tax is a fixed amount that does not move with what you earn. In tax planning it means a regime for wealthy new residents that swaps tax on foreign income for a set yearly sum, or for tax on a deemed base such as living costs.
The regimes come in 3 forms. Italy and Greece charge a fixed sum on foreign income, Switzerland taxes a base set by your spending, and Guernsey and the Isle of Man cap the normal bill, with Jersey cutting the rate on income above a set level. Malta's minimum taxes and the paid extension of Cyprus's non-dom status set a floor or a price instead.
Of the legal ways to pay less tax by moving, a lump sum is the one that fixes the bill before the year starts, which suits people whose foreign income is large and steady.
Lump sum tax regimes compared
Lump sum and tax cap regimes for individuals, checked October 12, 2026
| Country and regime | How it works | Yearly amount | How long | Who qualifies |
|---|---|---|---|---|
| Switzerland, lump-sum taxation | Ordinary rates on living costs | Federal base at least CHF 435,000 (about $523,000) or 7 times the rent | No end date | Foreign nationals new to Switzerland or 10 years away; no work there |
| Italy, flat tax (art. 24-bis) | Fixed sum on foreign income | €300,000 (about $341,000), plus €50,000 (about $56,900) per family member | Up to 15 years | Not resident in 9 of the previous 10 tax periods |
| Greece, investor lump sum (art. 5A) | Fixed sum on foreign income | €100,000 (about $114,000), plus €20,000 (about $22,800) per relative | Up to 15 years | €500,000 (about $569,000) invested; not resident in 7 of the previous 8 years |
| Isle of Man, tax cap | Normal tax up to a ceiling | At most £220,000 (about $292,000), £440,000 (about $584,000) for a couple | 5 or 10 years | Residents who elect it |
| Guernsey, tax cap | Normal tax up to a ceiling | At most £160,000 (about $212,000) on non-Guernsey income, £320,000 (about $424,000) on worldwide income | While elected | Residents who elect it |
| Jersey, High Value Residency | 20% on the first £1,250,000 (about $1,660,000), 1% above | £287,500 (about $381,000) on £5,000,000 (about $6,630,000) | While approved | By application |
Switzerland: lump-sum taxation on living costs
Swiss lump-sum taxation lets people who are not Swiss citizens, who become fully taxable there for the first time or after at least 10 years away, and who do not work in Switzerland pay tax on their living costs instead of their income, under article 14 of the federal direct tax act. A married couple living together must both meet the conditions.
The base is the yearly living costs of you and your dependents, in Switzerland and abroad, but never less than the highest of 4 floors in article 14(3): CHF 435,000 (about $523,000) in 2026, 7 times your yearly rent or a home's rental value, 3 times the yearly price of board and lodging if you have no household, or your gross Swiss-source income. That base is taxed at the ordinary rates, and the federal floor is indexed to prices.
The Swiss-source floor counts income from Swiss property, investments, pensions and royalties. It also counts income on which you claim relief under a double tax treaty, and where a treaty partner grants relief only if Switzerland taxes that income at the full rate, that country's income joins the base too, under article 14(5).
| Worldwide living costs | CHF 400,000 (about $481,000) |
|---|---|
| Federal floor for 2026 | CHF 435,000 (about $523,000) |
| 7 times the yearly rent | CHF 560,000 (about $673,000) |
| Gross Swiss-source income | CHF 150,000 (about $180,000) |
| Federal tax base, the highest of the 4 | CHF 560,000 (about $673,000) |
The base is taxed at the ordinary federal rates, under article 14(4). The canton and commune tax their own base on top, with their own minimum.
Cantons run their own version for cantonal and communal tax, and 5 have dropped it: Zurich after a 2009 vote, then Schaffhausen, Appenzell Ausserrhoden, Basel-Landschaft and Basel-Stadt, the Federal Department of Finance notes. Thurgau, St. Gallen, Lucerne and Bern kept it on stricter terms.
At the end of 2018, 4,557 taxpayers used it and paid CHF 821 million (about $987 million) between them, under 0.1% of all taxpayers, the same page reports; the right ends with Swiss citizenship or gainful work in Switzerland.
Italy: €300,000 a year on foreign income
Italy's flat tax for new residents replaces income tax on all foreign income with €300,000 (about $341,000) a year, plus €50,000 (about $56,900) for each family member you add, for up to 15 years, under article 24-bis of the income tax code. You qualify if you were not Italian tax resident in at least 9 of the 10 tax periods before the move.
The sum is paid in 1 installment by the income tax balance deadline. The law asks for a favorable ruling (interpello) from the Agenzia delle Entrate first; you then elect in the return for the year of the move and name your last country of residence.
You can leave chosen countries outside the regime and take a foreign tax credit on their income. Gains on qualifying holdings sold in the first 5 tax periods stay under the ordinary rules, and holders skip the foreign-asset report and the IVIE and IVAFE taxes on foreign property and financial assets, under the same article and its notes.
A missed payment ends the option, and once it is revoked or lost you cannot elect it again. Normattiva shows the current text in force until December 31, 2026. From January 1, 2027 the regime moves, with the same amounts, to article 246 of the new consolidated income tax act, Legislative Decree 117/2026, so a 2027 mover should read that article first.
Italian-source income, including work done in Italy, stays taxed at the normal rates.
Greece: €100,000 a year for investors
The Greek non-dom lump sum charges €100,000 (about $114,000) a year in place of tax on all foreign income, plus €20,000 (about $22,800) for each relative you add, for up to 15 years, PwC reports. You must not have been Greek resident in 7 of the 8 years before the move, and you, close relatives or a company you control must invest at least €500,000 (about $569,000) in Greek property, businesses or securities within 3 years of applying, the same summary adds.
The sum is due by December 31 each year, whatever the foreign income was. Tax paid abroad on covered income cannot be credited against it, and an unpaid sum ends the regime, after which you are taxed on worldwide income.
Greek income, such as rent from the investment property, is taxed normally.
When a lump sum beats ordinary tax
A fixed sum gets cheaper per euro as income rises. The effective tax rate it produces is the sum divided by your foreign income, so Italy's €300,000 (about $341,000) is 30% of €1,000,000 (about $1,140,000) and 3% of €10,000,000 (about $11,400,000), on the article 24-bis amount.
Whether the sum pays off depends on the tax you would owe without it. Italy taxes capital gains on financial assets at 26%, PwC notes, so the flat tax matches ordinary tax on about €1,150,000 (about $1,310,000) of gains a year.
- Flat tax (art. 24-bis)
- Ordinary tax at 26%
Source: Italy: TUIR article 24-bis at Normattiva; 26% rate: PwC Worldwide Tax Summaries; both listed under Sources
Show the numbers
| €500,000 | €1,000,000 | €1,500,000 | €2,000,000 | €3,000,000 | |
|---|---|---|---|---|---|
| Flat tax (art. 24-bis) | €300,000 | €300,000 | €300,000 | €300,000 | €300,000 |
| Ordinary tax at 26% | €130,000 | €260,000 | €390,000 | €520,000 | €780,000 |
Greece taxes dividends at 5% and most interest at 15%, PwC reports, which puts its break-even at €2,000,000 (about $2,280,000) of dividends or about €667,000 (about $759,000) of interest taxed at 15%. Interest on listed corporate bonds has been taxed at 5% since April 11, 2025, the same page adds, so its break-even is the same as for dividends. Switzerland has no single break-even, because the base follows your rent, your spending and your canton.
Tax caps in the Isle of Man and Guernsey, and Jersey's 1% rate
A tax cap works the other way around: you pay the normal tax until it reaches a ceiling, and nothing above it. The Isle of Man lets residents cap income tax at £220,000 (about $292,000), or £440,000 (about $584,000) for a jointly assessed couple, for an irrevocable 5 or 10 years, against normal rates of 10% and 21%, PwC reports.
Guernsey taxes residents at 20% and caps the tax on non-Guernsey income at £160,000 (about $212,000), or on worldwide income at £320,000 (about $424,000), for those who elect it, according to PwC. New residents who buy open market property for more than £1,500,000 (about $1,990,000) can cap tax on worldwide income at £60,000 (about $79,600) for the year of arrival and the 3 years after, PwC adds.
Jersey has no cap. Its High Value Residency, granted by application, taxes the first £1,250,000 (about $1,660,000) of income other than Jersey property income at 20% and the rest at 1%, PwC notes. On £5,000,000 (about $6,630,000) of income that comes to £287,500 (about $381,000), an effective 5.75%, on the same rates.
Minimum taxes and paid extensions: Malta and Cyprus
Neither Malta nor Cyprus charges a fixed yearly sum on foreign income. Malta's Global Residence Programme taxes foreign income brought into Malta at 15% with a €15,000 (about $17,100) yearly minimum, under its rules. Cyprus residents who become deemed domiciled after 17 of the last 20 years can pay €250,000 (about $284,000) up front for each of up to 2 more 5-year periods of Cyprus non-dom status, which covers their dividends and interest, KPMG Cyprus sets out.
Who a lump sum tax suits, and who it does not
Lump sums were written for people living on capital. They fit best for:
- Investors living on foreign dividends, interest and gains, the income the Italian and Greek sums cover.
- Retired founders and heirs who do not work, the profile Switzerland's no-work rule is written for.
- Families moving together, since Italy and Greece add relatives for a fraction of the main sum.
- People who want a known bill, fixed in advance for up to 15 years in Italy and Greece.
They are the wrong tool for:
- Freelancers and remote workers, whose fees are taxed where the work is done; the tax incentives for new residents that cut the rate on pay suit remote employees, and only a few, such as Greece's 5C regime, reach the self-employed.
- Founders selling a company soon after moving to Italy, because gains on qualifying holdings in the first 5 tax periods are taxed normally.
- US citizens, since the US taxes citizens on worldwide income wherever they live, the IRS states.
Who can use Swiss lump-sum taxation
Qualifies
You are a Canadian who sold a software company in 2025 and lives on a portfolio. You and your wife rent a house near Montreux, neither has lived in Switzerland before, and neither takes paid work there, so you can be taxed on your living costs.
Does not qualify
You move to Lugano and keep advising your consultancy's clients from a home office there. That is gainful activity in Switzerland, so lump-sum taxation is closed and your worldwide income is taxed at the ordinary rates.
A lump sum can cost you foreign tax credits
Say your €1,000,000 (about $1,140,000) of foreign dividends arrives with 15% withheld at source, €150,000 (about $171,000). Greece does not credit that against its €100,000 (about $114,000), PwC notes, so you pay €250,000 (about $284,000) in all, 25% of the income. Italy lets you leave the paying country outside its flat tax instead, so that income is taxed at the ordinary rates with a credit for the tax withheld, under article 24-bis; you name it when you elect or in a later change to the option.
How to apply for a lump sum regime
Each one starts with your past years of residence; after that, Italy needs a ruling before you elect, Greece an application and an investment, and the Isle of Man and Guernsey an election, while in Switzerland you settle the base with the canton.
Applying for a lump sum regime
- Count your past years of residence: Switzerland needs a first Swiss tax liability or 10 years away, Italy 9 of the previous 10 tax periods, Greece 7 of the previous 8 years.
- Switzerland: pick a canton that still offers lump-sum taxation and settle the base with its tax office before you sign a lease.
- Italy: file the ruling request, elect in the return for the year of the move, list any countries to leave outside the regime, and pay by the balance deadline every year.
- Greece: apply to the tax administration by September 30 (move by July 2 to start in the year of arrival), complete the €500,000 (about $569,000) investment within 3 years, and pay by December 31 every year, as PwC sets out.
- Isle of Man and Guernsey: make the cap election with the island's revenue service; the Isle of Man's 5 or 10 years cannot be undone.
- Plan the end: Italy and Greece stop after 15 years, and a missed payment ends either regime early.
David's note
I would not elect a fixed lump sum on the strength of one big year. The sum is due in the lean years too, and Italy does not let you back in once you leave the regime. I look for foreign income that clears the break-even every year with room to spare; if it only clears it in the year a company is sold, the regime is the wrong tool.
