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Old 02.03.2011, 01:36
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Tax at source for 2nd pillar

Hello,

I have tried searching the site, and have not been able to find an answer to my question.

Situation: I am in CH on B permit and am taxed at source, and contribute every month into 2nd pillar.

Complication: Looking at my monthly income statement I can see that all of the taxes are applied to my gross salary (including my contributions to 2nd pillar).

Question: Now I believe that additional tax is applied to 2nd pillar once I withdraw it (being upon leaving CH or retirement), so it does not make sense for that money to be taxed twice (first at source and then at withdrawal). Is this really the case? Or is it something I should talk to my accounting folks, or will it just be fixed when I file my tax return.

Thanks for you input.

Alex
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Old 02.03.2011, 02:12
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Re: Tax at source for 2nd pillar

Your 2nd pillar payments are transfered by your company, and this money should not appear on your annual tax declaration as taxable income. You should speak with your company human resource person.
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Old 02.03.2011, 11:05
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Re: Tax at source for 2nd pillar

The taxation at source is done on the gross salary without any deduction, so that is ok.

When you get a C permit you will be allowed to do your tax declaration and deduct plenty of things, however the percentage of taxes is almost the double according to where you live (canton + gemainde) compared to taxation at source. So at the end you will pay almost the same amount of taxes.
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Old 30.06.2011, 12:04
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Re: Tax at source for 2nd pillar

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When you get a C permit you will be allowed to do your tax declaration ...
Even if you don't have a C permit, you can still opt to do a tax return (and if your income is high enough, you have to do one).

What chiarina is trying to say is that when you get your C permit, tax at source no longer applies, and an annual tax return instead is mandatory.

However, my understanding is that the table companies use to calculate tax-at-source (Quellensteuer) incorporates the deductibility of pillar 2 deductions from salary, so deductions are generally correct.
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Old 30.06.2012, 18:31
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Re: Tax at source for 2nd pillar

Hi Alex,

I'm not sure you ever got an answer to you inquiry. A lot depends on if you are a US passport holder. If so, then any contribution you make is nothing more than a deposit into a regular banking account (for US income tax purposes). You see, the amounts you contribute, and the amounts your employer contributes are all considered normal income. The US does not recognize CH pensions as pensions. They are nothing more than another banking account.

Does this help?
Eric
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