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Old 12.01.2013, 12:56
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Re: Optimizing Pillar 3a

Before you even think of getting into this, please make sure you are fully aware of the US tax implications involved with opening a Pillar 3.

As a US citizen, you are still under the worldwide tax net, regardless of country of residence, and a Pillar 3, in principle, is not advantageous in this case. Lowering your Swiss Tax liability will increase your US Tax liability if you make enough money above the FEIE and FHE. The US does not recognize Pillar 3 as a tax deferred pension scheme (narcissism alright)!

Also, Pillar 3 could fall under PFIC reporting rules (separate forms to be filed) and would be viewed as a Foreign Trust (3520s to be filed), on top of FBAR and the FATCA forms.

In a nutshell, you probably won't be getting any tax savings and you will have to file a lot more burdensome forms every year under the threat of draconian IRS penalties for one tiny mistake or delays. In fact, it could become an unwanted Tax Liability since any depreciation of the US dollar would be taxed on the entire Pillar 3 balance (which the IRS narcissistically would recognize as a gain; essentially you are being taxed for America's fiscal incompetence).

Worth the hassle? I'm keeping my investments as simple as possible until I ditch my US passport.

Last edited by brusch; 12.01.2013 at 13:06.
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