Hi, planning to move outside EU/EFTA for 1–2 years to run my Swiss GmbH remotely.
The Setup:
Real Departure: We are deregistering from Canton A, terminating our lease, and selling our furniture. No residential ties will remain.
The Withdrawal: Moving 2nd/3rd pillar assets to a foundation in Canton Schwyz for withdrawal as non-residents.
The Return: We will settle in Canton C (where the business is based), not the original Canton A.
The Question: Is returning after only 12 months likely to be flagged as “tax avoidance”, or is 24 months the only safe threshold to ensure the original canton doesn’t claim the move was just a short-term maneuver to access the funds?
Looking for insights from anyone who has done a similar “canton-hop.” Thanks!
Now I am not a fan of “intention based taxation”* but the rules being as they are, IMO, if they are doing their job, even a “new to you” tax office should get suspicious of a Swiss person (or someone having worked in CH before) returning to CH with no funds in pillar 2 or 3.
And the whole thing, as described and as I imagine it filling in the missing information, looks so blatantly obvious that I don’t think you stand a chance in a court IF you get scrutinised.
With you running your company on top of it all, there seems to be arguably no reason to withdraw funds.
*I would like for them to take out the intention part and change taxation based on something clear:
Either close the “loophole”: Withdrawal not taxed in the foreign country? - ok taxation in CH. (Similar to the US taxing their nationals in foreign countries.)
Or just accept foreign taxation: withdrawal within another tax scheme: Ok pay the taxes that apply if any. Congratulations if there are no taxes, please come back to CH and spend the money here.
“Long” answer : You are setting up a plan to withdraw funds from your pension accounts for the sole purpose of avoiding the taxes associated with such a withdrawal (due to a change of canton). These funds can normally only be withdrawn under five conditions, one of which is permanently leaving Switzerland to move to a foreign country. Is a 12-month departure considered a permanent departure? No. Is a 24-month departure considered a permanent departure? No.
There are, however, nuances. A 12-month departure may be considered permanent if the person clearly intended to settle abroad but, due to difficulties abroad, was forced to return to live in Switzerland. What kind of difficulties? Visa issues, inability to find employment, or the sudden cessation of a self-employed business due to legal, financial, or other reasons.
In your case, it is impossible to say that you are leaving Switzerland permanently since you continue to operate a Swiss company from abroad. You therefore still have ties to Switzerland, and it will be difficult to argue that you returned due to difficulties encountered there.
This is merely my opinion, based on some knowledge of the relevant laws. I advise you to consult a lawyer for further clarification.
@Rumpstenen You will most likely not find anyone who did your exact scheme, so you’ll have to bear with others talking on more general terms.
While I generally have some sympathy for people who try to interpret a sloppily created law to their benefit, your plan seems, as mentioned by the previous contributors, to directly go against a clearly worded article (my highlight) :
sie die Schweiz endgültig verlassen;
(Source)
It is therefore not about leaving one canton, but about leaving Switzerland permanently.
In EU/EFTA, you can only take out the super- mandatory part of pillar A, which means that the amount stated under BVG-Alterguthaben (the mandatory part) will stay in canton Schwyz. Depending on how much it is, it may look like an ordinary pension fund to your new employer. Unfortunetely, you will move to the same canton where your employer is residing. It is your GmbH and I do not know how separately the tax people treat this.
I went for 3 years, took out the super- mandatory part of my pension fund and then came back to a new employer in CH. It went well, but then I had really wanted to leave Switzerland forever. The pandemic happened which gave me a good reason to come back to a sane harbor.
Given the political climate in some European countries, it will be easy in 1-2 years to find a reason why the expatriation didn’t work out.
Last but certainly not least, you must always have one adminstrator of your GmbH living in Switzerland. Otherwise, your GmbH could be liquidated by the autorithies.
I can’t remember which case as I saw it when looking at cases relating to buy backs but you can check the cases below. What I remember was that putting the pension fund in SZ was viewed as an indication of motive to withdraw the money later due to the low taxes.
Pension Buy-Back Shortly Before Leaving Switzerland (2025, 9C_349/2024 and 9C_350/2024)
Systematic Buy-Backs to Address Divorce Gap Followed by Capital Withdrawal (2025, 9C_206/2024)
Buy-Backs Immediately Before Departure Without Intent to Return (2024, 9C_527/2023, 2A.461/2005)
Post-Divorce Buy-Back with Short Turnaround (2017, 2C_408/2016, 2C_409/2016)
BGE 2C_658/2009 (12 March 2010) – Three-Year Rule and Consolidated View
BGer 2A.461/2005 – Pre-Emigration Buy-Back Denied
Three-Year Rule Strict Application—Buyback and Lump-Sum from Separate Accounts
BGer 2A.408/2002 – Early Withdrawal for Real Estate
BGE 142 II 399 (2016) – Buyback Funded by Loan Pre-Retirement; Tax Evasion
Firstly, the point of pension fund benefits is to provide for you in your old age. In principle, withdrawals based on emigration are based on the assumption that you will leave Switzerland for good.
That said: In practice, you have the legal right to withdraw your pension fund benefits when you give up residence in Switzerland and take up residence in another country (unless a social security agreement waives that right, which is the case with EU countries).
When you withdraw your pension fund benefits after leaving Switzerland and taking up residence in another country, the benefits are subjected to a Swiss withholding tax in the canton where the pension fund or vested benefits foundation is located. You may be able to reclaim this withholding tax if the country you move to has a relevant DTA with Switzerland.
The laws do not specify a minimum amount of time that must be spent as a non-resident. That is because whether or not you have to keep Swiss pension fund benefits depends on whether or not you are subject to Swiss social security laws. That is clearly not the case when you are not a resident of Switzerland (unless the country you live in has a social security agreement with Switzerland that extends the jurisdiction).
So in short, you have every right to withdraw your pension benefits when you leave Switzerland and take up residence in an eligible country. Once you withdraw your benefits, you are not required to reimburse your pension fund upon return to Switzerland, though you can make voluntary buy-ins to close the gap.
Aas long as the withdrawal is taxed correctly (Swiss withholding tax and/or taxes in your new country of residence), then there is no tax avoidance.
Of course, a withdrawal made with a very short stay abroad (e.g. a few months) would likely raise questions. As noted by others, the hold on withdrawing the portion of benefits made up of voluntary buy-ins applies to early withdrawals based on emigration as well.
This is true but separate from whether you can withdraw or not is the question of whether you will get a claw back of tax deductions when you withdraw.
In the example where the individual leaves Switzerland for the USA (for example), can the individual avoid paying taxes in the USA on the 2nd/3rd pillar and only pay the withholding tax in Switzerland?
Barring peculiar behavior like making voluntary contributions shortly before leaving Switzerland, there should not be any issues. The introduction of the waiting period for early withdrawals of voluntary buy-ins largely closed the loophole of circumventing taxes by making huge buy-ins shortly before leaving and then withdrawing benefits shortly after leaving.
But simply choosing to return to Switzerland at a later date does not disqualify you from previous tax benefits. I’ve never seen this to be an issue.
Basic rule is that you get taxed in both. Then you rely on tax agreements to reduce it. In the best case, you can reduce it to zero. In the worst case you end up paying a lot of tax to 2 countries.
I don’t think you can reduce it to zero? Treaties only tend to avoid double taxation so if the other countries doesn’t tax it you will pretty much always get the Swiss withholding.
Yes. I know of cases reduced to zero. You move to a country which doesn’t tax it, but has a tax treaty with Switzerland saying that only the other country can tax it. Then you claim the refund from Switzerland.
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