| || |
| || || |
| || |
I know that similar questions were discussed over and over here, but I could not find any answer to my situation.
I am a non-US and non-Swiss citizen that will move to the US. I heard that once I get my 2nd pillar pension payout here in CH, the US will tax me on it as income?? Is that true? This does not make sense to me... Why would the US do it if the money was earned here and these are savings?
BTW, I never lived in the US before.
Any experiences to share?
| || || |
There are two separate issues here:
(1) The USA -- with its universalist exceptionalism -- taxes everybody within its bailiwick (citizens, residents, deemed residents, constructive residents...) on worldwide income.
(2) Every country may tax all income arising within its borders first.
HOWEVER, most tax treaties address at least some of the conflicts, usually because the constituency of the negotiating parties (national treasuries) has the ear of those negotiators: i.e. global corporations.
For a lot of reasons beyond the scope of this forum (one of which was the integration of US company pensions with social security) most modern US tax treaties address pensions and social security, and many give exclusive taxation rights to one of the signatory states, notwithstanding (and derogating from) item (1) above.
Pensions and Annuities
1. Subject to the provisions of Article 19 (Government Service and Social Security), pensions and other similar remuneration beneficially derived by a resident of a Contracting State in consideration of past employment shall be taxable only in that State.
2. Subject to the provisions of Article 19 (Government Service and Social Security), annuities derived and beneficially owned by a resident of a Contracting State shall be taxable only in that State. The term “annuities” as used in this paragraph means a stated sum paid periodically at stated tines during a specified number of years or for life under an obligation to make the payments in return for adequate and full consideration (other than services rendered).
Whoever does your taxes will know how to handle this. If you do your own, perhaps with TurboTax, you may have to make a manual adjustment. (Professional tax preparers, if they use TurboTax (or another brand of software) themselves, have a model that isn't sold retail, that allows them to fix conflicts.)