Managing Pillar 2a and Tax Implications Before Leaving Switzerland

[diste66]

I’m planning to move from Switzerland later this year and would appreciate some advice on how to best manage my Pillar 2a and understand the tax implications of my decisions.

Current Situation (Simplified):

• 30% of my assets are in Pillar 2a.
• 70% are in ETFs.

My Plan:

1. Large Pillar 2a Contribution: I’m considering making a substantial contribution to my Pillar 2a before leaving Switzerland to significantly reduce my taxable income this year.
2. Pillar 2a Strategy After Leaving: I’m thinking about moving my 3a into my 2a as well and increasing my 2a allocation to 50% of my total assets. My idea is to keep the Pillar 2a in Switzerland and invest it there after I move, while placing the remaining cash in deposit accounts in Italy to diversify.

Questions:

• Tax Implications: If I make a large contribution to my Pillar 2a now but leave Switzerland later this year, will I still receive the full tax benefit from that contribution when I file my taxes? How are taxes calculated in this scenario, and are there any potential pitfalls I should be aware of?
• Investment Strategy: Does it make sense to keep a significant portion of my assets in Pillar 2a (vs withdrawing) and invest them in Switzerland after I’ve moved to Italy? Are there risks or considerations that I should be mindful of?

[nabalzbhf]

@diste66

How are taxes calculated in this scenario, and are there any potential pitfalls I should be aware of?

It should be fine afaik, the only pitfall is that some things are pro-rated, and make sure it still makes sense wrt to your marginal tax rate (e.g. buying back to reduce income to 0 is likely a bad idea).

@diste66

• Investment Strategy: Does it make sense to keep a significant portion of my assets in Pillar 2a (vs withdrawing) and invest them in Switzerland after I’ve moved to Italy? Are there risks or considerations that I should be mindful of?

IMO if it’s globally diversified, it shouldn’t matter much. Though I don’t know how Italy treats vested benefits accounts (in many EU countries I think it grows tax free).

[Barto]

@diste66

Large Pillar 2a Contribution: I’m considering making a substantial contribution to my Pillar 2a before leaving Switzerland to significantly reduce my taxable income this year.

Consider how you are going to withdraw from the money from 2a at a later date. For example if you plan to withdraw it whilst being an Italian resident, will it be taxable in Italy and will the tax rate be higher or lower than the tax rate you are avoiding in Switzerland?