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Old 01.04.2020, 03:09
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Cantonal Tax on Vested Benefit when Leaving Switzerland

Hi,

Quick question about pensions, please.

When you leave Switzerland, I know that you can take your pension with you and have this transferred to your new country of residence into a suitable pension structure. When this is done, in Switzerland you will pay a small amount of withholding tax and this is different according to the canton where your pension provider is registered. I heard that Canton Schweiz is meant to be the lowest, for example.

My question: Does anyone have an up to date list of what cantons charge what for this and an official source, e.g. Swiss federal government.

Im not being lazy - I have tried to source this and cant find a definitive list but dont want to cobble this myself from various sources since I need to confirm this info "officially" to a Canadian tax advisor who doesnt seem to get that cantons charge different rates.

Thank you very much,
M
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Old 01.04.2020, 09:25
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Re: Cantonal Tax on Vested Benefit when Leaving Switzerland

https://finpension.ch/vergleich-quellensteuer/

Gives you the tax rate per vested benefit institution, so where the money is held.
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Old 01.04.2020, 14:34
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Re: Cantonal Tax on Vested Benefit when Leaving Switzerland

SZ is canton of choice for the withdrawal possibility you describe.


But even more important than canton is for you to check the tax treatment of the withdrawal in your new country of residence. What's the point of saving some small X% in swiss tax when you risk having to pay XX% income tax on it to Canada?


The other two withdrawal possibilities:
  • withdraw the money right before you leave Switzerland. You will pay tax according to your last residence canton's rates, not the canton of your pension foundation. It's pointless to switch in this case.
  • withdraw the money while you're in tax residence limbo: after leaving Switzerland but before settling as a resident somewhere else. You pay tax according to domicile canton of pension foundation, so it makes sense to move the money to a foundation in SZ.
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Old 01.04.2020, 14:45
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Re: Cantonal Tax on Vested Benefit when Leaving Switzerland

Also if you withdraw the money while being a tax resident somewhere else already, the swiss actually should refund you the withdrawal tax. So, it's pointless to switch pension foundation canton as well in this case too. You'll need to provide a document from your current tax authorities that you've declared the withdrawal to them.
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Old 01.04.2020, 15:14
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Re: Cantonal Tax on Vested Benefit when Leaving Switzerland

Quote:
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https://finpension.ch/vergleich-quellensteuer/

Gives you the tax rate per vested benefit institution, so where the money is held.
Thank you, Snoopy - this is exactly what I was looking for - you are a superstar!
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Old 01.04.2020, 15:19
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Re: Cantonal Tax on Vested Benefit when Leaving Switzerland

Quote:
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SZ is canton of choice for the withdrawal possibility you describe.


But even more important than canton is for you to check the tax treatment of the withdrawal in your new country of residence. What's the point of saving some small X% in swiss tax when you risk having to pay XX% income tax on it to Canada?


The other two withdrawal possibilities:
  • withdraw the money right before you leave Switzerland. You will pay tax according to your last residence canton's rates, not the canton of your pension foundation. It's pointless to switch in this case.
  • withdraw the money while you're in tax residence limbo: after leaving Switzerland but before settling as a resident somewhere else. You pay tax according to domicile canton of pension foundation, so it makes sense to move the money to a foundation in SZ.
Thanks, Spark. We have left Switzerland already so cannot take advantage of being in tax limbo - you are the first person who has ever offered that information, none of the tax people I was speaking to at the time knew about it (or they were sitting on the info until I paid them) so I wish I had asked back when I left. Anyway, water under the bridge.

We would be doing a pension to pension transfer so there are no income taxes to pay in the target country. There is the possibility to perhaps claim back the WHT in Canada but we are looking into this.

What is slightly annoying is that my wife just paid $500 for a Canadian tax advisor who said he was an expert in Swiss taxes and he didnt know that the rates differed by canton.

Thanks to you both!
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