I am a Swiss national, and I am planning to live in the US for 3-5 years.
I have left my employer in Switzerland and am now asked to take my retirement savings out of the pension fund. I intend to open a "Freizügigkeits"-account for my 2nd Pillar savings, and I have already called a few banks: However, they are either charging high fees or don't offer services at all for people outside of the EU/EFTA.
Does anyone know of a recommended provider in Switzerland? Or am I better off taking out the savings entirely and keep them in the US?
I am trying to avoid that the savings end up at BVG and would like to pick my own provider instead. My issue is that I haven't found a bank yet that offers (reasonably charged) accounts for persons living abroad.
Id kill to get mine as cash and invest it as I please! Do this even moderately sensibly and it should outperform very poor Swiss 2nd pillar performances.
Make sure you stay less than 183 days in the US for that year. (Include previous years for the calculation) that makes you avoid federal tax.
If withdrawal date of Pension funds is before you arrive to US, then you can also avoid state tax, if payment is later than your arrival to US and you are still less than 183 days you only pay state tax.
Very Interesting. Do you have experience that the 183 day rule is applied?
Withholding tax would be payable in Switzerland when withdrawing the 2 pillar. The US-CH dual tax treaty says that pensions are only taxable in country of residence. If it is possible to prove to the CH authorities that one is resident in US when the 2P is withdrawn then it should be possible to apply to CH to refund the witholding tax.
Would mean it could be possible to withdraw 2P without taxes depending on the state?
The 183 day is the most commonly known residency rule, but it is not the only rule that can be applied by the revenue authorities if they deem it appropriate.
The pay out of the fund in Switzerland will not be done in a few weeks. Your employer may not even made the final settlement with the pension fund for several weeks for a start.
Taxing the pension of an individual and taxing the capital sum may not be the same thing. On top of which most simple avoidance schemes are usually blocked.
I'm afraid an early withdrawal of 2nd pillar would not qualify as pension in context of the tax treaty. For income to be counted as pension, it needs to be under the pension payment rules, i.e., age criteria met etc.
The withdrawal due to no soc.security agreement are of a different category.
Further, the US does not consider the 2nd pillar a qualified plan ... US tax payers need to declare the Swiss 2nd pillar employer contributions as income in the year it was earned and cannot deduct their own contributions from taxable income.
you'd need to be resident of US prior withdrawn is allowed ( as you could go to any other place in EU and there would be different rules for it) . Only way is to speak to tqx attorney that is expert in both US and Swiss law - you'd not likley be the first one with such case.