How are 3a equivalent foreign accounts treated by the tax authority?

Hi everyone,

I searched around in the forum and didn’t see this question anywhere.

In Portugal we have similar accounts to the 3a called PPR (Retirement Savings Plan, loosely translated).

They have a double tax benefit, you can deduct what you invest (Not applicable being tax resident in CH) and when you cash out you will only pay 8,6% as opposed to 28% capital gains (applicable if moving back to Portugal in the future).

Would this be counted towards my total wealth? Most of them are structered as a portuguese pension fund so they don’t have any ISIN I could provide to the tax authority.

I am wondering additionally since these are pension accounts if they would have similar treatment to the 2nd and 3rd pillar and not being counted to your total wealth.

Thank you in advance!

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Hi there,

according to my canton’s (Bern) tax authorities

  • privileged accounts (pillars 2 and 3a) don’t count towards your wealth, and premiums can be deducted from your taxable income, whereas.
  • other accounts count towards your wealth and premiums cannot be deducted.

I think many countries have a 3a-equivalent scheme to motivate people to save towards their retirement. But I think it’s also normal that you can only benefit from the respective tax-related benefits while being a resident and therefore taxpayer in that country.

I have a similar retirement account from another country where the value is not visible in a straightforward manner at the end of the year. So time the tax declaration comes around, I ask them for an official statement of the account value as of 31st of December of the preceding year (this may take a few weeks!). Then I add the corresponding CHF value into the “other assets” → “Endowment and pension insurance (Pillar 3b)” subsection of my declaration.

Cheers,
J.

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Finpension advertise to the contrary:

“Sie können das Geld weiterhin in der Schweizer Säule 3a belassen und profitieren so Jahr für Jahr von der Steuerbefreiung der Erträge”

I believe this is the relevant question:
Is it counted as part of your wealth or not?

I don’t think so. I think they are just an entitlement to eventual future benefits. See, for instance, the wording of the Swiss tax administration:

“Die gebundene Selbstvorsorge dient ausschliesslich und unwiderruflich der Vorsorge und vermittelt nur Anwartschaften (circular No. 18).

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PS: Through Googling I found this article by a Swiss tax expert:

Quote: “Es erfolgt grundsätzlich eine sinngemäss gleiche Anwendung der Besteue- rungsregeln für ausländische Vorsorgeleistungen, sofern Vergleichbarkeit gegeben ist.”

As far as I understand (Wikipedia), these plans are generally quite similar to Swiss 3a plans - though you are free to cancel at any time, while retroactively giving up the tax benefits?

I’d argue that they should not be taxable Switzerland prior to withdrawal/payout, similar to Swiss 3a (which, in reverse, can be paid out early due to emigration) plans. Though it obviously begs the question: What if you do cancel early?

Disclaimer: I’m not a tax advisor, just an ape armed with a screen and a keyboard.

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Thank you for the input both San_Francisco and Johnny_B!

I will probably reach out to the canton tax authorities and ask around in “Portuguese in Switzerland” groups.

We are talking of a really low amount so if I need to eventually pay wealth tax on that it won’t kill me but I would be happier if I didn’t have to :smile:

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