Tax deduction of payments into a foreign (german) pension

Hi y’all👋

Could you point me to the regulations for deducting payments into foreign pension schemes from taxes?

Thanks so much in advance!


Hi and welcome to the forum!

According to PWC:

So I would guess you need to contact your local tax authority and they need to asses if your foreign pensions scheme payments can be deducted or not.

Also according to this Post a foreign pension might be worse because of double taxation/withholding tax if there is no tax treaty between Switzerland and your foreign pension fund domicile.

Thank you for your answer! Yes, this is the kind of information I also found but I can’t seem to find the primary source behind, the laws about this.

(For some context: I asked the tax office very broadly and among other, simpler questions and they simply answered no without inquiring or explaining, so I need to find out if there is a basis to bring this up again in my situation.)

Thank you for the second part of your post, something to investigate looking forward.

I would suggest you start with the double taxation agreement between Switzerland and the other country.

You should be able to find it with an internet search. For example “switzerland uk double taxation agreement”. In this agreement pensions are covered in article 18

I wonder now if UK Voluntary NICs would also be deductible.

I can’t imagine that any voluntary contributions to foreign pensions are deductible from Swiss income taxes, unless the maximum deduction would be shared with pillar 3a. I.e., you couldn’t contribute/deduct more in total per year, you could simply choose between contributing to pillar 3a or a foreign pension that is considered equivalent. Otherwise, Swiss residents without foreign pensions would be at a disadvantage, which can’t be in the interest of the general population.

Allowing withdrawal from certain foreign pension funds at the reduced capital withdrawal tax rate sounds more reasonable, though.

The answer to these questions are in the CH-UK double tax treaty above:

No. Because they are not deductible for UK residents from their UK income tax either

Treaty outlines it could be allowed in certain special cases that it seems to me would be rare (might be in case you moved to Switzerland mid year and were living here but working in UK)

Thank you this seems to be the right way and the UK one gives very specific advice!
I tried to find the information in the treaty with Germany and no success so far… :confused:

Edit: added the country to the title as this seems to be country specific.

My wife in the past made some voluntary payments into the German Pillar 1 pension system. I included this in the tax return but this was not recognized. Back then did some research and found a similar case (couple making payments into German Pillar 1, tax office did not recognize, went to court). I believe it was this case:

The court ruled against them. They then went on to complain at the Bundesgericht which decided in their favour:

Not sure whether this applies to you. Ultimately I did not bother as the amount was not big and the case not trivial (each situation may have unique aspects). May have tried referencing this case though…