JANUARY 21, 2007
Switzerland aims to squeeze more from rich
Formula 1's top driver have long been taking advantage of Switzerland's generous taxation system, which allows them to get away with paying taxes based on the value of their property rather than their income. Different cantons are currently allowed to choose their own taxation rates but the average tax is around five times the rental value of the residence, with a minimum tax bill of around $60,000. This generates a great deal of money for the more generous cantons while also adding to their image as glamorous places to live - which suits the cantons fine.
There are now arguments, however, that the system is discriminatory as wealthy Swiss are paying much more than the foreigners.
The finance ministers of the 26 Swiss cantons met in Berne on Friday to discuss a proposal to double the tax rates. In the end they decided on a more cautious approach and delayed the decision for six months in order to look at the comparative systems employed in other tax havens such as Ireland, Luxembourg and Monaco.
It is felt that an increase in the taxes will not result in the loss of any of the super-rich as they can afford a price hike without needing to consider moving out.
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