We’ve thought it through with a couple of Greek members here, but it’s unclear.
In brief:
You can become a resident essentially immediately if you’re an EU citizen, or very fast if you’re married to a Greek citizen
You need to spend 183 days in Greece to be eligible to become a tax resident
Once you do you’re liable for a hefty tax of your 2nd pillar: currently any euro of a lump sum payment above 40,000 is taxed at 44%
The window of opportunity, with gray legality, is withdrawing your 2nd pillar in Switzerland (and getting taxed here) before you become a tax resident in Greece; that’s gaming the system’s rigidity but it doesn’t obviously break any laws
it’s unclear what sort of proof you moved abroad will be acceptable to Swiss pension funds to release your second pillar (and Greece is in the EU anyway, so we’re talking only about the extramandatory part); if they need proof of address that’s easy, if they need proof of tax residency…that puts you on points 2 and 3
The favorable tax treatment of retirees from abroad means that you only pay 7% tax on a foreign pension for 15 years, but it’s unclear if early withdrawal of the 2nd pillar will be considered a pension or not
That’s all considering that ones 2nd pillar can very well be much bigger than the 3rd pillar. Add to that that UCITS ETFs are tax free, we’re wondering if it makes more sense to plug everything in ETFs and minimal in 2nd and 3rd pillars.
Point of lack of clarity: on point 2, if one deregisters from Switzerland and due to the technicalities of the system can’t be registered elsewhere for 6 months, then it’s the paradox of not being a tax resident anywhere. CH and GR have a DTA, so income taxed in CH is exempt from tax in GR, and this is the gray zone: if CH taxes your second pillar and you receive after you’ve no more tax obligations in CH and before you have tax obligations elsewhere…is this feasible?
It’s pretty unclear how the system will play it: if they will accept that it’s their rigid technicalities which made it impossible to you to register (so they can extract their juicy share off your efforts in CH) OR be much more agile and flexible when it could mean it’s you owing them money. In the case of deregistering or claiming tax exemptions they drag their heels and make it as hard as possible, leveraging every little bureaucratic technicality in the book.
Thx Mirager!
I’m EU so the whole residency piece is simple. Hmmm…a lot to consider. Indeed, I agree that my 2nd Pillar is way more than my 3rd and who wants to pay 44% or roll the dice that CH takes it’s slice. Thanks for your considered response. Cyprus is also an option (GF is an in demand medical specialist), so I may also do some digging on there.
Thanks again
Same here, also Schwyzer Kantonalbank. Most could be done while still in Switzerland, rest was just a visit to the embassy.
One word about tax-hell countries like Spain: if you really want to live there (and I understand why, it is a beautiful country with beautiful people but a stupid tax regime) consider taking a long vacation first in any country that does not tax lump sum payments. I really see no reason to give almost half of your lifetime savings to the taxman in a country that had absolutely nothing to do with you making the money.
This might be relevant here: I just confirmed with Finpension customer service online to withdraw the Pillar 3a when leaving Switzerland permanently, you need to “notarize your signature” on a form.
So closing the account will incur extra costs, something to keep in mind.
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