Do you have to pay taxes on Swiss retirement benefits in Germany?
September 24, 2014 | 25,00 EUR | answered by Ralph J. Schnaars
Hello, I am Swiss and living in Germany. I would like to save money for my retirement in Switzerland through pillar 3b. This would be done with a Swiss retirement savings product.
My question is: when it comes time to withdraw the money at age 65, how and where do I need to pay taxes on the lump sum payment or monthly pension payments? Because the money contributed is already taxed as net income.
As far as I know, pillar 3b in Switzerland is tax-free. Does this also apply to me as a Swiss living abroad in Germany?
Thank you for your response.
Dear questioner,
My experience in Swiss tax law is by no means sufficient to comment on Swiss tax obligations, but as far as I know, the Pillar 3b is also not completely tax exempt in Switzerland.
However, since you live in Germany and therefore have German tax obligations to fulfill, I must inform you that the "pension benefits" from a "capital investment" – including the Swiss Pillar 3b – are fully taxable.
For "pensions" recognized as old-age provision in Germany, taxation with the respective tax rate share applies until 2040. This rate increases from 2014 (68%) to up to 100% in the year 2040.
If your Swiss capital investment is not recognized or will not be recognized as a "tax-privileged pension" in Germany, the income will be treated as normal income from capital assets and will be subject to your normal tax rate, potentially allowing for the offset of any income taxes paid in Switzerland.
In order to be recognized as a "pension," it is important to consider, for example:
- The claims to the pension provision product must not be inheritable, transferable, encumbered, saleable, or capitalizable.
I hope I could help you to some extent
Sincerely,
Ralph J. Schnaars
STWB Steuerberatungsgesellschaft mbH
Direct contact +49 (0)171 525 20 42
Email mail@stwb-steuer.de
