# Voluntary 2nd pillar purchase
**URL:** https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362
**Category:** Banks, Insurances & Third Pillar
**Created:** [October 19, 2018, 8:17am UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362 "2018-10-19T08:17:37Z")
**Posts on this page:** 20
**Page:** 6
### Author:  [@Abs\_max](https://forum.mustachianpost.com/u/Abs_max)
#### Post date: [March 29, 2025, 11:29am UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/107 "2025-03-29T11:29:43Z")
I believe this one is not possible to prove in any way unless the mortgage is really 3 years (unusual) and not 5 years / 10 years (more common)
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### Author:  [@1742](https://forum.mustachianpost.com/u/1742)
#### Post date: [March 29, 2025, 11:33am UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/108 "2025-03-29T11:33:40Z")
> [@Abs\_max](#):
>
> (unusual)
I wouldn’t say a three year mortgage is unusual, in fact I believe a three year SARON (framework) is quite popular. But yes, _unusual_ is the key word here. If what you are doing looks odd from the outside, it’s potentially tax evasion. If you buy-in every year into your 2nd pillar and eventually use it to repay a mortgage \> no issue. If you buy-in with one hefty lump sum around the time of buying a house on mortgage \> issue.
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### Author:  [@Abs\_max](https://forum.mustachianpost.com/u/Abs_max)
#### Post date: [March 29, 2025, 11:35am UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/109 "2025-03-29T11:35:53Z")
Agreed
Lot of people think that they can outsmart the system , but tax office has also very smart people 🙂
But I think sometimes if might be a bit complicated. Let’s say a person contributes every year for 5-10 years and then stop because they thought they should buy a RE. Now they cannot use their 2nd pillar for at least three years , so they might have to wait for 3 years before buying a RE. What happens when they ask for withdrawal after 3 year waiting period ? Is it tax evasion or simply tax compliance
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### Author:  [@nabalzbhf](https://forum.mustachianpost.com/u/nabalzbhf)
#### Post date: [March 29, 2025, 11:41am UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/110 "2025-03-29T11:41:45Z")
Personally I love the swiss way:
> **7.2.** Selon la jurisprudence, il y a évasion fiscale: a) lorsque la forme juridique choisie par le contribuable apparaît comme insolite, inappropriée ou étrange, en tout cas inadaptée au but économique poursuivi; b) lorsqu’il y a lieu d’admettre que ce choix a été abusivement exercé uniquement dans le but d’économiser des impôts qui seraient dus si les rapports de droit étaient aménagés de façon appropriée et c) lorsque le procédé choisi conduirait effectivement à une notable économie d’impôt dans la mesure où il serait accepté par l’autorité fiscale ([ATF 147 II 338](https://www.bger.ch/ext/eurospider/live/de/php/aza/http/index.php?lang=de&type=show_document&page=1&from_date=&to_date=&sort=relevance&insertion_date=&top_subcollection_aza=all&query_words=&rank=0&azaclir=aza&highlight_docid=atf%3A%2F%2F147-II-338%3Ade&number_of_ranks=0#page338) consid. 3.1; [142 II 399](https://www.bger.ch/ext/eurospider/live/de/php/aza/http/index.php?lang=de&type=show_document&page=1&from_date=&to_date=&sort=relevance&insertion_date=&top_subcollection_aza=all&query_words=&rank=0&azaclir=aza&highlight_docid=atf%3A%2F%2F142-II-399%3Ade&number_of_ranks=0#page399) consid. 4.2; [138 II 239](https://www.bger.ch/ext/eurospider/live/de/php/aza/http/index.php?lang=de&type=show_document&page=1&from_date=&to_date=&sort=relevance&insertion_date=&top_subcollection_aza=all&query_words=&rank=0&azaclir=aza&highlight_docid=atf%3A%2F%2F138-II-239%3Ade&number_of_ranks=0#page239) consid. 4.1 et les références). Si ces trois conditions sont remplies, l’imposition doit être fondée non pas sur la forme choisie par le contribuable, mais sur la situation qui aurait dû être l’expression appropriée au but économique poursuivi par les intéressés ([ATF 147 II 338](https://www.bger.ch/ext/eurospider/live/de/php/aza/http/index.php?lang=de&type=show_document&page=1&from_date=&to_date=&sort=relevance&insertion_date=&top_subcollection_aza=all&query_words=&rank=0&azaclir=aza&highlight_docid=atf%3A%2F%2F147-II-338%3Ade&number_of_ranks=0#page338) consid. 3.1; [142 II 399](https://www.bger.ch/ext/eurospider/live/de/php/aza/http/index.php?lang=de&type=show_document&page=1&from_date=&to_date=&sort=relevance&insertion_date=&top_subcollection_aza=all&query_words=&rank=0&azaclir=aza&highlight_docid=atf%3A%2F%2F142-II-399%3Ade&number_of_ranks=0#page399) consid. 4.2; [138 II 239](https://www.bger.ch/ext/eurospider/live/de/php/aza/http/index.php?lang=de&type=show_document&page=1&from_date=&to_date=&sort=relevance&insertion_date=&top_subcollection_aza=all&query_words=&rank=0&azaclir=aza&highlight_docid=atf%3A%2F%2F138-II-239%3Ade&number_of_ranks=0#page239) consid. 4.1 et les références).
>
> L’autorité fiscale doit en principe s’arrêter à la forme juridique choisie par le contribuable. Ce dernier est libre d’organiser ses relations de manière à générer le moins d’impôt possible. Il n’y a rien à redire à une telle planification fiscale, tant que des moyens autorisés sont mis en oeuvre. L’état de fait de l’évasion fiscale est réservé à des constellations extraordinaires, dans lesquelles il existe un aménagement juridique (élément objectif) qui - abstraction faite des aspects fiscaux - va au-delà de ce qui est raisonnable d’un point de vue économique.
This keeps the tax code simple (not like many countries where the tax code is full of corner case, and then more corner cases on top and then still full of hole), and relies on people having reasonable judgement.
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### Author:  [@nabalzbhf](https://forum.mustachianpost.com/u/nabalzbhf)
#### Post date: [March 29, 2025, 11:44am UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/111 "2025-03-29T11:44:08Z")
> [@Abs\_max](#):
>
> Now they cannot use their 2nd pillar for at least three years , so they might have to wait for 3 years before buying a RE. What happens now? Is it tax evasion or simply tax compliance
You’re never forced to withdraw your second pillar, and you can always pledged it as well. And you can always ask the tax authorities in advance for guidance.
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### Author:  [@wapiti](https://forum.mustachianpost.com/u/wapiti)
#### Post date: [March 29, 2025, 11:50am UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/112 "2025-03-29T11:50:44Z")
This decision from the federal court doesn’t give clear guidance. I’m a bit afraid it will be used by tax administrations to refused a lot of buybacks
Let’s take some alternative scenarios:
-If the person would have done buybacks in during multiple year in 2017, 2018, 2019, 2020, 2021 for 240k each year. Would it be also tax evasion?
-If the person would have done a buyback in 2021 but only for 25k. Would it be also tax evasion?
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### Author:  [@Abs\_max](https://forum.mustachianpost.com/u/Abs_max)
#### Post date: [March 29, 2025, 11:51am UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/113 "2025-03-29T11:51:19Z")
Yes. It’s not forced but not everyone have enough liquidity, so using 2nd pillar amount is good approach for many.
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### Author:  [@Abs\_max](https://forum.mustachianpost.com/u/Abs_max)
#### Post date: [March 29, 2025, 11:55am UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/114 "2025-03-29T11:55:15Z")
As far as I see, in this case , the issue is not only the unusual pattern but also what happened after that.
Someone making a 240K contribution to 2nd pillar is not usual. But I think if that was the only thing then I don’t think it can be called tax evasion. It’s actually the use of tax provision
In my view, the main problem here was not the voluntary contribution. But the fact that person knew that she will be leaving the company (and country) and still made the purchases into the 2nd pillar of that company and then broke the money into vested benefits accounts in lower tax cantons. All three things together led to the conclusion because most likely the new country allows for withdrawal of vested benefits at preferential terms.
I believe the concept of voluntary purchases is not to make provisions of lower taxation for an individual. The purpose is to incentivize people to have a good pension at time of retirement.
The real intention matters the most.
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### Author:  [@nabalzbhf](https://forum.mustachianpost.com/u/nabalzbhf)
#### Post date: [March 29, 2025, 12:19pm UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/115 "2025-03-29T12:19:16Z")
> [@wapiti](#):
>
> Let’s take some alternative scenarios:
> -If the person would have done buybacks in during multiple year in 2017, 2018, 2019, 2020, 2021 for 240k each year. Would it be also tax evasion?
> -If the person would have done a buyback in 2021 but only for 25k. Would it be also tax evasion?
The decision pretty clearly says that would have followed a regular pattern and wouldn’t be unusual.
The issue was a 3x higher buy-in, a few months before moving abroad. (They also mention the fact they moved abroad was the issue, not necessarily the fact they switched company)
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### Author:  [@Abs\_max](https://forum.mustachianpost.com/u/Abs_max)
#### Post date: [March 29, 2025, 12:33pm UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/116 "2025-03-29T12:33:59Z")
One question. It seems the part below (translated) talks about some sort of criteria for “attempted tax evasion” which was met because tax savings were significant. Are you aware of any criteria in terms of absolute tax savings or % tax savings that exists to determine a potential case of tax evasion?
_The cantonal court also considered that the legal structure in question, if it were to be accepted for tax purposes, would have provided the appellant with a significant tax saving (i.e. CHF 74,860). It held that ultimately the criteria for attempted tax evasion were met, so that the refusal to deduct the total amount of the buy-ins made in 2021 for the IFD and the ICC was justified._
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### Author:  [@PhilMongoose](https://forum.mustachianpost.com/u/PhilMongoose)
#### Post date: [March 29, 2025, 1:22pm UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/117 "2025-03-29T13:22:03Z")
> [@Abs\_max](#):
>
> In my view, the main problem here was not the voluntary contribution. But the fact that person knew that she will be leaving the company (and country) and still made the purchases into the 2nd pillar of that company and then broke the money into vested benefits accounts in lower tax cantons. All three things together led to the conclusion because most likely the new country allows for withdrawal of vested benefits at preferential terms.
Yes, there was clearly a premeditated set of steps leading to the cash leaving the country at an advantageous tax rate. Personally, I think such tax planning should be allowed.
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### Author:  [@1742](https://forum.mustachianpost.com/u/1742)
#### Post date: [March 29, 2025, 3:45pm UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/118 "2025-03-29T15:45:08Z")
> [@Abs\_max](#):
>
> Are you aware of any criteria in terms of absolute tax savings or % tax savings that exists to determine a potential case of tax evasion?
The judge looks at the case, determines it to be looking like tax evasion, and then goes through all elements that could be used to justify that it wasn’t. This includes the arguments “_but it was just an ordinary buy-in I do yearly_“ and “_it can’t be tax evasion, I haven’t even saved that much_”.
But no, there isn’t (and can’t be) a threshold in the law for tax evasion that isn’t tax evasion. It’s the judge who decides, and usually this is something in your favour, where you are let off the hook because your tax evasion wasn’t too significant.
> [@PhilMongoose](#):
>
> Personally, I think such tax planning should be allowed.
I’d argue the opposite. You shouldn’t be allowed to leave a country with untaxed income from employment, even if that income has been parked in retirement savings. If you leave the country, your pillar 2/3a should be taxed (at those highly beneficial tax rates).
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### Author:  [@PhilMongoose](https://forum.mustachianpost.com/u/PhilMongoose)
#### Post date: [March 29, 2025, 3:50pm UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/119 "2025-03-29T15:50:06Z")
> [@1742](#):
>
> If you leave the country, your pillar 2/3a should be taxed (at those highly beneficial tax rates).
Why?
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### Author:  [@finalcountdown](https://forum.mustachianpost.com/u/finalcountdown)
#### Post date: [March 30, 2025, 10:59am UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/120 "2025-03-30T10:59:36Z")
Agree, it is not the size of contribution, absolute or in percentage of income that is the issue. I discussed this at length with my tax advisor as I have done signifikant pillar 2a contributions and was concerned they would not be accepted. Not been an issue, as also was opinion of tax advisor
The case at hand is interesting, she bought into her pillar 2a up to 2 days before leaving Switzerland.. what is it had been 3 months before? 6 months? 1 year? Must you wait that the previous year tax return is processed and pillar 2a contribution accepted before moving the funds to a Finpension account, for example, and then leave Switzerland? How much time in the Finpension account before cashing it out to not trigger tax evasion challenges?
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### Author:  [@1742](https://forum.mustachianpost.com/u/1742)
#### Post date: [March 30, 2025, 12:10pm UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/121 "2025-03-30T12:10:21Z")
> [@PhilMongoose](#):
>
> Why?
Because I believe all income earned in a country should be taxed by that country (and only by that country).
With retirement accounts, you may end up paying some taxes years later after leaving the country (e.g. upon withdrawing the money), but depending on the country (or more accurately the relevant double tax treaty) you might never be taxed on that income by the country you originally earned it in.
For example, I have a seven-digit pension fund from both contributions but also heavy buy-ins. That money hasn’t been taxed by Switzerland yet. I could now move to Italy and withdraw it all, paying nothing in Switzerland (the tax at source would be refunded) and only 5% in Italy. I might just do exactly that, but it shouldn’t be allowed. In more extreme cases, you can even circumvent taxation entirely.
> [@finalcountdown](#):
>
> what is it had been 3 months before? 6 months? 1 year? Must you wait that the previous year tax return is processed and pillar 2a contribution accepted before moving the funds
I think it’s actually quite easy: If you buy into your 2nd pillar before deciding to leave the country you’re good, if you do it after, you’re evading tax. So, accepting a foreign job offer and then buying in \> tax evasion. Looking for a foreign job offer and buying in at the same time \> grey area, likely not provable in court. Buying in and then getting a call from a headhunter the next day \> you’re good to go. Again: It is your intention that counts. Whenever you are buying into your 2nd pillar, while thinking already about how to withdraw it shortly thereafter (including withdrawing it immediately after the three year lock-up), it’s probably tax evasion.
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### Author:  [@PhilMongoose](https://forum.mustachianpost.com/u/PhilMongoose)
#### Post date: [March 30, 2025, 12:19pm UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/122 "2025-03-30T12:19:03Z")
> [@1742](#):
>
> Because I believe all income earned in a country should be taxed by that country
> (and only by that country).
So if I earn money in the UK and then move to Switzerland, you think I shouldn’t be taxed on interest on that money, or have wealth tax imposed on those savings that were earned there?
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### Author:  [@1742](https://forum.mustachianpost.com/u/1742)
#### Post date: [March 30, 2025, 12:26pm UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/123 "2025-03-30T12:26:05Z")
You earn the interest while you are a resident of Switzerland? \> You shall be taxed on that interest by Switzerland!
Wealth tax is an entirely different discussion. Yes, I believe it’s fair that Switzerland is taxing your wealth stemming originally from UK income, because that is the tax system of Switzerland and a wealth tax is one approach of many to have a bit of wealth redistribution. Would I do it if I were to redefine the entire Swiss tax system? No, because I wouldn’t have a wealth tax, but a hefty inheritance tax for your eventual heirs (see, then it is income again for them that is being taxed 😄)
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### Author:  [@Dr.PI](https://forum.mustachianpost.com/u/Dr.PI)
#### Post date: [March 30, 2025, 12:47pm UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/124 "2025-03-30T12:47:12Z")
@1742 , @PhilMongoose : you have expressed your opinions, and this is where we should stop this topic before it turns sour.
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### Author:  [@wapiti](https://forum.mustachianpost.com/u/wapiti)
#### Post date: [March 30, 2025, 1:56pm UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/125 "2025-03-30T13:56:11Z")
> [@finalcountdown](#):
>
> Agree, it is not the size of contribution, absolute or in percentage of income that is the issue. I discussed this at length with my tax advisor as I have done signifikant pillar 2a contributions and was concerned they would not be accepted. Not been an issue, as also was opinion of tax advisor
Do we have number on this topic?
Someone could sell her wealth and do a buy back. In this case, the buy back could be a lot higher than income?
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### Author:  [@Abs\_max](https://forum.mustachianpost.com/u/Abs_max)
#### Post date: [March 30, 2025, 2:05pm UTC](https://forum.mustachianpost.com/t/voluntary-2nd-pillar-purchase/1362/126 "2025-03-30T14:05:55Z")
As far as I understand - the person doing these steps always know what are they doing
If they are building up their pension, they are good. That’s what voluntary pension contributions is meant for.
If they are trying to dodge tax with a plan to withdraw money again soon (house, move abroad etc), then this can get disputed
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