Third Pillar 3a withdrawal date

Banks, Insurances & Third Pillar
1

Hello,

I have Third Pillar funds in cantonal bank Schwyz, while I reside in Vaud. I will be turning 65 in October and now Schwyz approached me asking me to withdraw the money on the day after my birthday.
We were planning on leaving Switzerland in November to a non European destination, and then withdraw the third pillar thereby get the lower Schwyz tax applied on the withdrawal.

So my question is it mandatory to take the money out on the day after the birthday, and if I have to avail of the lower Schwyz tax rates, leave Switzerland before my 65th birthday in October?
Or can I request delay till I depart in november?
I would appreciate your feedback as all I have found is discussion on withdrawals 5 years before or after retirement if you are working, but nothing on a specific date of withdrawal.

2

Yes it is. No going around that.

Only if you can provide evidence that you are still working after your 65th birthday.

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3

Thank you. So I will have to make plans to leave Switzerland before my birthday.

4

I am not sure if it would help or not.
Because maybe you would be considered tax resident of Switzerland for 2024 as you have spent 9 months this year already.

Perhaps best to talk to tax consultants which deal with international tax law and migration

5

Yes, I am tax resident for 2024, but with no income as I have not worked. Also if I depart before my 65th birthday, my cantonal residence will not be Vaud, but my foreign address and since funds are with Schwyz, the cantonal rates of Schwyz will apply as I will be out of Switzerland on that date.

6

Okay. Glad it would work for you

7

Doesn’t mean you have no taxable income. Dividends, for example.

8

This will work. 3a withdrawal taxes are unrelated to income taxes.

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10

Note that depending on where you plan to resettle, you may not be liable for taxes on your 3rd pillar in CH. This depends on the DTA between CH and your new country of domicile.

Check out this article and its map (also available in FR/IT via the menu).

11

Don‘t some of these countries tax those withdrawals as normal income? Portugal for example?

12

Could very well be the case that they tax it as income. Looking at the map above, 3rd pillar withdrawals get taxed in Portugal. It is up to them to decide how they do that.

13

In some countries only if you are a resident. And in some countries income derived abroad is exempt from tax

14

Thanks that’s useful. But I am not sure how you approach the bank and tell them not to tax you due to the DTA between CH and the new country. Hopefully they are aware of the taxation issues on the 2nd and Third Pillar.

15

You do not need to approach the bank. If you are not resident in CH at the time of withdrawal, they will simply apply the withholding tax (WHT).

It is then up to you to provide to the tax authorities the evidence that you have been taxed in your country and they will reimburse you the WHT. If you do not provide such evidence or if the withholding tax is not reclaimable (i.e., the DTA assign the right of taxation to Switzerland) then the relevant tax authority will just keep the WHT.

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