I'm a Russian resident and I assume there is no pension agreement or whatsoever between RU-CH.
Is it really that easy to get the tax deduction? How difficult is it to withhold the money in the end (on leaving)? How much time does it take to file all the papers? Does anyone have the experience?
Same question is on the 2nd pillar...
I'd rather go for a 3a account (like a bank account). As an employed you can contribute 6565chf max per year. So if you are single it's about 13'000chf after 2 years. If self-employed you can put much more.
You say you pay source tax and you expect the tax saving to be 40%. If your marginal tax rate for source tax is really 40% then you must be earning at a level to be liable for filing a tax return - therefore your source tax is really only a pre-payment against this.
As for withdrawing when you leave switzerland, with 3a I don't think there are any restrictions, but i'm not sure. With pillar 2 there certainly are restrictions, as money withdrawn within 3 years of making additional purchases can be considered tax evasion, and you could be liable for the taxes you initially saved when contributing.
Anyway, as stated below, insurance related investments are usually not good for the short term - if it's the tax saving you want rather than the insurance, go for a simple bank/savings account version of 3a (all banks offer this i think).
Finally, the tax you will pay when withdrawing from the account after leaving the country, will depend on the value you withdraw and the location where the account foundation is registered, but for 2 years of pillar 3a (max 2 x 6.5k) is likely to be much less than 8%.
(i ask this because you talk about tax saving, which sounds strange with pillar 2)
If you are paying quellensteuer and additionally file a tax form, the quellensteuer becomes a downpayment and you would then be taxed appropriately on your taxable income (ie excluding the amount paid into BVG). You would end up paying or receiving the difference from what you paid in quellensteuer. So in this case your BVG contributions are transparently tax free as they should be.
Because of the tax efficiency, there are restrictions on withdrawal. One issue relating to this has been recently clarified by the tax authorities. My understanding (which is superficial and lacking detail on specifics) is that if you are making 'additional purchase' contributions above the minimum BVG level then no withdrawal of any of your surplus can be made within 3 years of the latest purchase without incurring an additional tax penalty, probably equivalent to the relief originally received on that purchase. One day I hope to get a more precise definition of this - hopefully not after the fact
is what u described normal or do some companies (especially federal institutions) already do it automatically? and what is the name of this tax form?
(btw, can you answer me about this? can 3a pillar be useful in this case? + other questions (eu citizen)
"is...normal or do some compaines...already do it automatically?' - i'm not sure what you mean - do what ? file a tax return for you ? it's possible that some offer such a service - i believe that some offshore/onshore IT service companies do for their staff, but fundamentally it is your responsibility.
"the name of the tax form" - in german the name of the full tax return is Steuererklärung. I believe there are light-weight forms used by source tax payers (mentioned elsewhere in this forum) for recovery of tax relief from e.g. 3rd pillar contributions - I don't know about those.
I made a reply on the other thread you linked to.
i just checked my latest statement, apparently I pay 228.55 CHF and my employer pays 342.8 CHF each month. Do I get reimbursed for the part I pay or for both?
You get both portions back provided you fullfill certail conditions:-
1. permanently leave Switzerland
2. become self employed
3. retire to a sunny place
You have to pay tax on this which in Zurich is 14%. You can reduce this by opening a vested benfit account in a low tax canton like Scwhyz (sp)
Note to get it paid out, if you are leaving the EU permanently eg back to Russia you can get 100% back. Leaving to within the EU there is a misconception you cant get it back, but this is only true for the "compulsory" portion. The over-obligatory part you can get back.
We were moving to the US, so were able to transfer the employer/employee contributions into a 'compte de libre passage' (special bank account into which you have to transfer your pension pot upon leaving a company). Our compte was with UBS, which is headquarted in Basel. We then cashed out this account and took the money and put it in a normal bank account, and paid a nominal amount of withholding tax based on the Basel registration (even though we lived in Vaud) - from memory, this was 4.6%. This is of course a STUNNING deal - pension cash, scarcely taxed at all, and unlocked into normal cash independent of age! Of course, you have to bear in mind that you now won't be receiving a pension equating to those years of employment, and plan accordingly.
Part of our 2nd pillar was held back and not able to be transferred/ cashed out, because we are UK (and therefore EU) citizens. My impression was that this was the bit that would ultimately buy a state pension in whichever nation state we end up. If, for example, we're in the UK, then we would have 4 years' credit from our time in Switzerland to put towards our UK pension.
Different rules apply if you've made voluntary over-contributions to the 2nd pillar, to buy extra years, etc. Various tax/bank people asked if we had made such payments within 3 years of our departure, and looked relieved when we said 'no', so I got the impression this would greatly complicate matters.
Is it quite quick or something that takes months?
If you're married, your spouse has to sign off the cash out, and it has to be notarised; that's mostly what took the time.
is this confirmed?
Hi all,
I am reviving this old thread instead of starting a new one, I think it is better. So, the question is about cashing out 2nd and 3rd pillar when leaving CH for an EU country.
For 3rd pillar it is clear, I can liquidate the accounts, fill in the forms and cash out the full amount. But how do I pay taxes on that? And I remember some conversations about transfering those funds to a tax friendly canton (e.g. Schwyz) and cashing out there. Is there a company doing that? And if yes, what king of tax benefits vs process fees are we talking about? Because if it is just 1% in net gain, then I do not think it is worth the hassle.
For 2nd pillar, I think there are two parts, the obligatory, which you cannot withdraw and has to stay in until you are retired and the non-obligatory, which you can withdraw. Is that correct? And for the money that you can withdraw, do the same as above for taxation apply?