A new low commission 3A/3rd pillar ETF solution from VIAC


Different withholding tax treatment of ETFs vs. Swiss Pension Funds should be also considered together with the TER.

For example:
US ETF: dividend yield 2%, withholding tax ETF 15% Ireland, 30% otherwise, while for Swiss pension fund 0% is achievable
Swiss ETF: dividend yield 2.5%, withholding tax 35%, while for Swiss pension fund 0%
Rest of the world: dividend yield 2.5%, withholding tax say 25%, while for Swiss pension fund probably 15% treaty rate

for a portfolio 40% Swiss, 30% US, 30% RoW the difference could reach easily 0.5-0.6%

(ETFs benchmarks include dividends after the full withholding tax at offshore rate)

I understand that some 3a funds (e.g. Swisscanto) replicate the indexes themselves and can take advantage of the double taxation agreements and also of special agreements for pension money.
In any case the tax difference for the Swiss part of the portfolio would be significant (35% withholding tax for ETF vs. 0% for pension money).

maybe insiders can confirm or elaborate further…


Sorry @balmung I’ve overlooked your post. Your are totally right about the withholding tax - it’s an important thing to look at when deciding which product to choose.

To clarify: 3a is not exempted from the withholding tax in the US. Our politicians f***ed that up with the the original DBA, as the US has some technical rules which apply and the 3a accounts where not covered with them. So the Swiss Government and the US planned to change that with an amendment protocol.

However, the amendment protocol was never ratified by the USA, as there was a tax dispute with Switzerland. Therefore, the status quo is still active.
In this matter, we have reached out to the ESTV and the SIF (State Secretariat for International Financial Matters) and wanted to put some pressure on them to finally make things work. Unfortunately without success - no one wants to put the head too far out of the window…


Where have you found this info ? How Swisscanto could have a special agreement ?


Sorry, I didn’t want to suggest that Swisscanto has a special agreement.
Concerning Swiss dividends, any Swiss Fund (with >80% Swiss investors) should be able to claim back the 35% withholding tax. 3a and BVG Funds should be in this category.
Concerning International dividends it depends country by country.
In the OECD model convention a “recognised pension fund” is considered a resident of the state where it is based, therefore it probably is able to get at least the 15% treaty rate (if not better). I would doubt pension money would be treated worse than an ETF.
I am not sure how the Double Taxation Agreements are applied in practice, there are complications.

Depending on geographical allocation there can be a bigger or smaller advantage in terms of withholding tax of a Swiss Fund (probably umbrella fund) vs ETF solutions. If you are highly skewed to CH equities for example.

From the Swiss point of view, my info are based on my not perfect understanding of the rather complicated book “Steuern kollektiver Kapitalanlagen - Die Besteuerung kollektiver Kapitalanlagen und deren Anleger” Hess, Toni


Dear @balmung

Thanks again for your feedback. We doublechecked the issue regarding the witholding tax once again. The conclusion was unfortunately still the same - as long as there is no change in the dba.

We will continue to monitor this and, in the event of a change, we will try to optimise it further.


Thanks for the feedback, but 3a get a refund of the Swiss withholding tax on Swiss ETFs right? (e.g. CSIF SMI https://www.ictax.admin.ch/extern/de.html#/security/CH0033782431/20171231)
that’s still something


Any update on english language support. its the only blocker for me as of now :slight_smile:


Yes, that’s true - we will pay out 65% immediately and the remaining 35% after we got it back. We try to optimize everything that is possible.


English will be released with our Update (Release 2) in early May


Just wanted to add a short 3 month VIAC user comment to this thread.
Transferred money over from an existing account in December 17, working my way up stepwise to Schweiz-100 starting from the 100% cash position on 31.12.17. Not all-in from the start due to high current market valuations & volatility. Sticking to the Schweiz product rather than Global at the moment as I’m more optimistic / less pessimistic about the Swiss market compared to Global at the moment.
To the product, all works well with the App and the re-balancings. Good clear documentation available on all transactions.
On a related but other note, I’ve just seen that Postfinance has sneakily (i.e. without actively informing) upped the TER on my other Postfinance Pension 75 product from 0.94 to 1.0%.


Argh I missed that good to know…the moment Viac allows a second account I’ll be done with PF


As far as I can see there is no desktop/ browser based access, only by smartphone app? awww i need a stay-at-home-phone for this^^


I pay 0.38% with only 0.03% TER. I have the global 60 portfolio.


Browser access is coming in spring they said. I will move ALL my 3a to viac as soon as I can have multiple accounts.

I was also thinking about doing my individual portfolio (also in spring I think) and buy the ETFs at VIAC which yield the hightest dividends in order to save taxes. Did someone else have similar thoughts?


I think you can only calculate the exact TER for the past, not for the future? so maybe they had higher cost than expected?

Anyway I am as unhappy as you because I also own some of these.


I’d say it’s pretty big bet. I think there’s much less probability that something wrong will happen to Global than to Swiss - and if something wrong happens to Global, the Swiss one will be anyway affected.


Individual/customised portfolio sounds interesting. Didn’t know that they will offer this. Yes, I reckon I’d also choose a high dividend selection if available.


In spring too. That’ll be a hell of an update…


Save taxes but lose money, great idea! Highest dividend payers are typically also the lowest quality companies, not exactly the kind of things I’d want to buy and forget until retirement.

Multiple accounts things is only relevant if you want to retire in switzerland and ok with locking your money until 65. If you leave the country and take the money early it will not really help you save anything, only cost time and maybe a bit of money. Besides, the tax difference is probably rather small unless we’re talking about high 5 - 6+ figures withdrawal

Depends on what you call swiss market. Most of SMI are global companies. As for the rest, well for one thing I’m pretty sure Switzerland is consistently behind world in terms of GDP growth, so I’d bet the opposite way long term


Oh man, I’m so disappointed I didn’t read this thread before. I wish I knew there was this meetup in Zurich. Would be cool to meet and talk about retirement plans :wink:. I feel sorry that only 1 guy showed up (but also glad that at least 1 did).

This VIAC 3a fund really looks good. It looks competitive to the all-world etfs, even if heavily overweight on Switzerland (Global 100 has 40% Switzerland???). So even with a 30 year investing horizon, it still looks like a good investment.

Regarding the long-term, just wanna know, what would happen if VIAC went into trouble? I suppose I would be allowed to transfer my funds to another 3a pillar?

Any other long-term risks? Like, how realistic is it that the authorities increase the Kapitalauszahlungssteuer to some ridiculous rate?