Have you accrued pension rights in Switzerland and now plan to leave the country? Naturally, you will want to know how to take your funds with you. Below, we explain the best way to retain significantly more of your hard-earned pension by reducing your tax liabilities.
Please read on to discover more, including how to minimise administration and ensure smooth dealings with the tax authorities.
Why is planning so important when withdrawing Swiss pension funds?
Workers and professionals who leave Switzerland can withdraw all their pension funds or pillar 3a assets. However, these payments generate liabilities for withholding tax based on regulations which vary from canton to canton. Notably, some restrictions apply if you emigrate to a European Union country.
Nonetheless, if you leave Switzerland permanently, it is possible to reduce the tax due on your pension savings. Who would turn down the opportunity to keep more of their pension fund? With the right advice, tax savings of more than 50 per cent are possible.
What are the three pillars of Swiss pensions?
The Swiss state pension (OASI) is the first pillar of retirement provision. After contributing for one year, anyone can claim a state pension in Switzerland. The amount payable varies with contributions paid and average earnings during those years.
Next, company pensions form the second pillar. The first two pillars combine. This provides a source of income to help retirees maintain their living standards during their later years.
In addition, astute savers often choose to make additional pension contributions — also known as top-ups. This option is the third pillar of Swiss pensions. It comprises financial products offered by leading local pension providers. Important: Contributions to a pillar 3a can be deduced from your income taxes. (max. amount for employees 2022: CHF 6’883.– and CHF 7’056.– for 2023.
Why a tax-friendly jurisdiction is crucial when you withdraw your pension fund
When you cash in vested pension benefits, a special tax rate applies when giving up a permanent residence in Switzerland. Instead of income tax, pension payouts are subject only to Swiss withholding tax. The rate depends on the location of your pension company’s registered domicile.
Here at Chevrolet Consulting GmbH, I work with several Foundations for Vested Pension Benefits. These organisations are registered in the canton with the lowest withholding tax rates in Switzerland. Thus, savings of up to half the tax otherwise due might be possible. Just to get an idea: One of my clients saved CHF 83’000.– by transferring his assets through Chevrolet Consulting GmbH, with only 4 signatures…
Through Chevrolet Consulting, I offer clients a tailored and efficient service with favourable terms. Professionals and workers who plan to emigrate from Switzerland can count on efficiency with standardised, automated and online processes.
In particular, as a pensions client, you can count on the following:
- Expert guidance through sometimes complex administration to avoid pitfalls.
- Straightforward opening of a vested benefits account.
- Glitch-free receipt of inwards payment transfers.
- Prompt international payments of funds received.
Example savings: tax on Swiss pension payouts
- Pension fund balance (savings capital) CHF 150’000.–
- Taxes on funds domiciled in Canton Zurich: CHF 10,225.–
- Via Chevrolet Consulting: CHF 4’975.–
- Tax reduction of 51 per cent: CHF 5’250.–
- Pension fund balance (savings capital) CHF 350’000.–
- Taxes on funds domiciled in Canton Basel-Stadt: CHF 31’175.–
- Taxes via Chevrolet Consulting CHF 15’175.–
- Tax savings of 51 per cent, so you keep an extra CHF 16’000.–
At Chevrolet Consulting GmbH, you can rely on expert advice and proactive pension tax planning. I specialize in pension transfer and withdrawal questions and fully understand the pension systems in Switzerland.
Therefore, you can rest assured that you are on the right track when you withdraw your pension fund in Switzerland. Please feel free to browse through my professional track record and financial experience.
Free initial pensions consultation
Naturally, you may have questions when considering withdrawing from your Swiss pension plan when you leave Switzerland. Chevrolet Consulting GmbH is a leading expert in Switzerland and your financial expert for occupational benefits.
As a result, clients can expect to halve their tax bills when emigrating from Switzerland. I will be delighted to confirm your eligibility, whether your pension investment is second-pillar or pillar 3a. If you are a current member of an occupational pension plan, please contact me in confidence for a free initial consultation.