BCGE will charge minor quarter fees for citizen living abroad.
In exchange of an annual fee, the bank will also generate a mandatory foreign. tax statement for your countries of residence (eg. IFU for France).
Yes, this was the extra-mandatory part of the pillar 2.
No idea if the money could be kept in a Swiss account (I transferred it internationally as I have finished with Switzerland), but also don’t see what the benefit of keeping the money in Switzerland (other than in the vested account) would be.
You may consider cashing out your 2nd and 3rd, may save a lot of tax. UK does not tax lump sum payments and you can move it to Kanton Schwyz before leaving, so you will pay only 4-5% tax in Switzerland. When you cash it out later while living in Switzerland you probably pay 2-5 times that.
Bear in mind that you may lose some insurance when cashing out the 2nd. But if you move it to a vested account you lose that insurance anyhow. Move it to a vested account with residence in Kanton Schwyz is a good idea. Here is a table with the relevant tax for the residence of the vested account: Quellensteuern auf Vorsorgebezügen | VZ VermögensZentrum
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That’s a good idea! However, if you come back to Switzerland, aren’t you supposed to pay back the 2nd/3rd pillar?
No. You are supposed to move the vested account back to the 2nd when you start working again in Switzerland, but this is not enforced. But if you already cashed it out you are not supposed to put it back.
However, I suppose you cannot deduct any buy-ins lower than the amount you took out. Not sure for how long. Otherwise this would be a big tax loophole. I’m not a tax expert, if you plan buy-ins later probably better speak to a tax consultant.
I did cash out my 2nd 11 years ago when living two years abroad, I suppose it still works the same way.
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If you plan to come back in couple of years, I think cashing out 2nd and 3rd pillar might not be good idea.
This provision is for people who are leaving Switzerland for good. You are Swiss and you are definitely not leaving for good. This might create an issue for you later
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Hi Mirager,
I’m thinking of Greece or Cyprus with my Greek GF. If, hypothetically, one was to retire before the Swiss pensionable age and take a lump sum from one’s pension - any idea if that lump sum is taxed?
Sorry, probably to detailed a question, but perhaps you know?
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.
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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 
CH certainly takes a smaller slice
From Luxembourg, I needed the following documents to get vested benefits out of Schwyzer KB Freizügigkeitsstiftung
- Original der Abmeldebestätigung der letzten Wohnsitzgemeinde in der Schweiz
- Original einer aktuellen Immatrikulationsbestätigung der Schweizerischen Botschaft
- Aktuelle und gültige Passkopie
- Original eines aktuellen Personenstandsausweises (erhältlich bei der Schweizer Heimatgemeinde)
- Auflösungsformular (der Freizügigkeitsstiftung)
So, no tax residency confirmation from LUX. That was only necessary to get back the Swiss tax at source while paying the LUX income tax.
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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.
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That’s mine and others’ exact driving sentiment too.
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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.
2 minutes and 20 CHF in my Canton’s Rathaus 
Liebe Community
Welche Möglichkeiten gäbe es um die 2. Säule ausbezahlt zu bekommen wenn ich mich schlussendlich in einem EU Land niederlassen werde.
Ich müsste mich zwischenzeitlich in einem nicht-EU Land melden.
Gibt es hierzu Erfahrungen? Tips?
———————
Dear Community,
What options are there to withdraw the 2nd pillar if I eventually settle in an EU country?
In the meantime, I would have to register in a non-EU country.
Does anyone have experience with this? Any tips?
Depending on your destination country it may be a good idea to settle in a non-EU country before going to your final destination. Check double tax treaties for the tax on lump sum pension payments. Choose a country that does not tax those payments.
I did that, used Costa Rica, but I think they have an expat tax now.
Those are the steps you take:
- Move your 2nd (and 3rd if exists) to an institution in Kanton Schwyz. It will be taxed at source there. I did use Schwyzer Kantonalbank because of the state guarantee.
- Move to a country where you can take out the 2nd and 3rd, then take it out.
- Move to your final destination.
You can get away with 4-5% tax that way.
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Are you planning to withdrawn you pension because you are of retirement age, or before that just because you can (like a true FIRE participant)?
Because in general it is as @cubanpete_the_swiss wrote. But, in some cases you might not need the additional step of a non-EU country. This applies if you are of actual retirement age, and it might even be the case before that in some EU countries (e.g. Italy if done properly taxes only 5%, Germany might be even less as paid-in capital itself can be exempted).
I suggest you get a proper tax consultant (any big four / tax consultancy with international presence will do). If that is too expensive, expat colleagues of mine had good experience with this guy (expats returning home seems to be his specialty).
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True, the non-EU country is only needed if you want to take out the money before the age of 60.
But you may still need a intermediate country if you plan to move to a tax hell. Just find out how much pension lump sums are taxed in your destination country, you probably don’t need a consultant for that. GB has zero tax for pension lump sum payments and there are probably more countries like that in Europe.
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I’m all for DIY, but withdrawing your pension capital is such a substantial tax risk that it’s one of the few things were everybody should get professional advice. Can be stupid little things (like routing it through the wrong bank account in Italy) and you end up taxed at full income tax rates.
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