* Low tax attracts foreign sport and music celebrities
* Rising opposition to unequal treatment for foreigners
* Several Swiss cantons scrapped special taxes in recent
By Emma Thomasson
ZURICH, Sept 13 Switzerland will keep its
special low-tax deals for wealthy foreigners such as music and
sports celebrities but increase the amount of tax they pay
following a vote by parliament which faced pressure to scrap the
The lower house of parliament voted late on Wednesday to
reject a proposal by the centre-left Social Democrats (SP) to
scrap the tax breaks but adopted a government plan to raise the
tax most rich foreigners have to pay.
"With this reform, we want to improve and strengthen the
acceptance of the flat-rate tax," Swiss Finance Minister Eveline
Widmer-Schlumpf told parliament, adding it would mean that 80
percent of those involved would pay more tax after the changes.
Switzerland has attracted more than 5,000 wealthy foreigners
to settle in the country with tax deals based on the rental
value of their property rather than their actual income or
wealth, on the condition that they do not work in the country.
Among those to take advantage of the scheme are Formula One
driver Michael Schumacher and pop stars Phil Collins and Tina
Turner as well as Switzerland's richest man, furniture store
Ikea founder Ingvar Kamprad, who moved to the country from
Sweden in 1976.
Opposition to favourable treatment for tax exiles has been
growing in Switzerland, with the cantons of Zurich, Schaffhausen
and Appenzell scrapping the policy in recent years after popular
referendums on the issue.
The canton of Bern is set to vote on the issue on Sept. 23.
It includes the Alpine resort of Gstaad, which has a reputation
as a playground for the rich and famous including French rocker
Johnny Hallyday and Formula One supremo Bernie Ecclestone.
RICH FLEE HIGHER TAXES ELSEWHERE
"The population has had enough of this special regime," SP
parliamentarian Susanne Leutenegger Oberholzer told parliament
as she sought support for a national end to the policy.
"It is an arbitrary regime, a regime that cannot be
verified, a regime that means that only a part of the actual
income and wealth of the affected people has to be taxed," she
said, noting that opposition from abroad was also on the rise.
Many of the tax exiles come from neighbouring France and the
number could rise due to a 75 percent supertax on income above 1
million euros ($1.29 million) proposed by Socialist President
Earlier this week, Bernard Arnault, France's richest man,
came under fire for his decision to seek Belgian nationality.
While parliament rejected the SP bid to end the special tax
system, it backed the Swiss government's proposal to increase
the basis on which taxes are levied to seven times the annual
rental value of rich foreigners' homes from five times now.
For those who live in a hotel, taxes will be levied on
three times the cost of their accommodation from a current two
times. The government will also introduce a minimum basis of
400,000 francs ($426,400) to qualify for special treatment.
The tax increase - which still must be approved by the upper
house of parliament - would be phased in over five years.
Switzerland recorded revenues of 668 million francs in 2010
under the scheme, with some areas - particularly in
French-speaking parts of Switzerland - more dependent on the
income due to higher numbers of rich foreigners living there.
The special tax was first introduced in 1862 by the canton
of Vaud along Lake Geneva in a bid to help the tourist industry
by encouraging wealthy pensioners to move to the country. The
government says 22,000 jobs are dependent on the scheme.
($1 = 0.7759 euros)
($1 = 0.9381 Swiss francs)
(Reporting by Emma Thomasson; editing by Jason Neely)