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)
I wouldnât 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, itâs 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.
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. Letâs 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
Personally I love the swiss way:
7.2. Selon la jurisprudence, il y a Ă©vasion fiscale: a) lorsque la forme juridique choisie par le contribuable apparaĂźt comme insolite, inappropriĂ©e ou Ă©trange, en tout cas inadaptĂ©e au but Ă©conomique poursuivi; b) lorsquâil y a lieu dâadmettre que ce choix a Ă©tĂ© abusivement exercĂ© uniquement dans le but dâĂ©conomiser des impĂŽts qui seraient dus si les rapports de droit Ă©taient amĂ©nagĂ©s de façon appropriĂ©e et c) lorsque le procĂ©dĂ© choisi conduirait effectivement Ă une notable Ă©conomie dâimpĂŽt dans la mesure oĂč il serait acceptĂ© par lâautoritĂ© fiscale (ATF 147 II 338 consid. 3.1; 142 II 399 consid. 4.2; 138 II 239 consid. 4.1 et les rĂ©fĂ©rences). Si ces trois conditions sont remplies, lâimposition doit ĂȘtre fondĂ©e non pas sur la forme choisie par le contribuable, mais sur la situation qui aurait dĂ» ĂȘtre lâexpression appropriĂ©e au but Ă©conomique poursuivi par les intĂ©ressĂ©s (ATF 147 II 338 consid. 3.1; 142 II 399 consid. 4.2; 138 II 239 consid. 4.1 et les rĂ©fĂ©rences).
LâautoritĂ© fiscale doit en principe sâarrĂȘter Ă la forme juridique choisie par le contribuable. Ce dernier est libre dâorganiser ses relations de maniĂšre Ă gĂ©nĂ©rer le moins dâimpĂŽt possible. Il nây a rien Ă redire Ă une telle planification fiscale, tant que des moyens autorisĂ©s sont mis en oeuvre. LâĂ©tat de fait de lâĂ©vasion fiscale est rĂ©servĂ© Ă des constellations extraordinaires, dans lesquelles il existe un amĂ©nagement juridique (Ă©lĂ©ment objectif) qui - abstraction faite des aspects fiscaux - va au-delĂ de ce qui est raisonnable dâun point de vue Ă©conomique.
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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Youâre 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.
This decision from the federal court doesnât give clear guidance. Iâm a bit afraid it will be used by tax administrations to refused a lot of buybacks
Letâs 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?
Yes. Itâs not forced but not everyone have enough liquidity, so using 2nd pillar amount is good approach for many.
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 donât think it can be called tax evasion. Itâs 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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The decision pretty clearly says that would have followed a regular pattern and wouldnât 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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One question. It seems the part below (translated) talks about some sort of criteria for âattempted tax evasionâ 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.
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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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 wasnât. This includes the arguments âbut it was just an ordinary buy-in I do yearlyâ and âit canât be tax evasion, I havenât even saved that muchâ.
But no, there isnât (and canât be) a threshold in the law for tax evasion that isnât tax evasion. Itâs the judge who decides, and usually this is something in your favour, where you are let off the hook because your tax evasion wasnât too significant.
Iâd argue the opposite. You shouldnât 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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Why?
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?
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 hasnât 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 shouldnât be allowed. In more extreme cases, you can even circumvent taxation entirely.
I think itâs actually quite easy: If you buy into your 2nd pillar before deciding to leave the country youâre good, if you do it after, youâre 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 > youâre 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), itâs probably tax evasion.
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So if I earn money in the UK and then move to Switzerland, you think I shouldnât be taxed on interest on that money, or have wealth tax imposed on those savings that were earned there?
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 itâs 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 wouldnât 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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@1742 , @PhilMongoose : you have expressed your opinions, and this is where we should stop this topic before it turns sour.
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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?
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. Thatâs 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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