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Old 31.10.2009, 19:33
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3rd pillar - Any reason to wait till December?

Hello everyone,

I read through the 3rd pillar posts with great interest and it seems to me that one has to pay the 6000 CHF something latest by December in order to be deducted from tax for the next March. My question is, is there any reason to wait till December only to deposit in the money? Well, I mean of course if we can afford to and instead of letting the money earning tiny interest in normal saving account, isn't it better to deposit it earlierst possible into the 3a account? Or maybe there are more offers coming out only in December?

Some side questions if anyone doesn't mind to share the knowledge:

1. How is the potential refund calculated if one pays tax at source? According to the tax chart, the amount taxed is always according to brutto income per month. If we, let' say pay 6k CHF into the 3a account, does it mean a general reduction of 500 CHF taxable income per month (hence looking at the chart for values brutto income minus 500 CHF?)

2. I read about the need to check the location of the bank to determine tax to be paid for future withdrawal if leave CH. Can anyone enlighten me about the name of the tax and where we can see it? I mean is it certain that the tax would be confirmed lower than the tax we save now? And I heard there is a difference whether one withdraw before leaving or after settling down at new country??

3. I got the choice between BPS (Suisse) Life Benefit and Postfinance. The BPS offers the highest rate but apparently it is not as well known as Postfinance. Any concern about that? Maybe it's better for choosing a bank where we can physically there when needed?

Thanks for the info.
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Old 31.10.2009, 20:48
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Re: 3rd pillar - Any reason to wait till December?

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Hello everyone,

I read through the 3rd pillar posts with great interest and it seems to me that one has to pay the 6000 CHF something latest by December in order to be deducted from tax for the next March. My question is, is there any reason to wait till December only to deposit in the money? Well, I mean of course if we can afford to and instead of letting the money earning tiny interest in normal saving account, isn't it better to deposit it earlierst possible into the 3a account? Or maybe there are more offers coming out only in December?

Some side questions if anyone doesn't mind to share the knowledge:

1. How is the potential refund calculated if one pays tax at source? According to the tax chart, the amount taxed is always according to brutto income per month. If we, let' say pay 6k CHF into the 3a account, does it mean a general reduction of 500 CHF taxable income per month (hence looking at the chart for values brutto income minus 500 CHF?)

2. I read about the need to check the location of the bank to determine tax to be paid for future withdrawal if leave CH. Can anyone enlighten me about the name of the tax and where we can see it? I mean is it certain that the tax would be confirmed lower than the tax we save now? And I heard there is a difference whether one withdraw before leaving or after settling down at new country??

3. I got the choice between BPS (Suisse) Life Benefit and Postfinance. The BPS offers the highest rate but apparently it is not as well known as Postfinance. Any concern about that? Maybe it's better for choosing a bank where we can physically there when needed?

Thanks for the info.
I pay my 3a contribution in January. Thus benefit from the higher interest rate, which is also tax free.

Swiss deposit insurance of CHF 100k also covers relatively unknown BPS, too.

Withdrawal taxes on emigration, depend where the provident trust is located. This may not be obvious. For example, ZKB and all other cantonal banks administer the 3a through Swisscanto, which is located in Basel.
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Old 31.10.2009, 21:34
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Re: 3rd pillar - Any reason to wait till December?

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Withdrawal taxes on emigration, depend where the provident trust is located. This may not be obvious. For example, ZKB and all other cantonal banks administer the 3a through Swisscanto, which is located in Basel.
Do you know the location for Postfinance? And what is the name for this withdrawal tax?

And I am concern about the withdrawal procedure when one leaves CH for good. Does anyone here actually really go find out the details as he/she plans to leave? Or maybe someone has the experience? (well, then he/she may no longer here in EF... Is the 3a account worth for expats that might stay here for only let's say 3 years, considering the paperwork and time involved for departure? How long it would take for withdrawal and what proof is needed? But anyway I reckon it shouldn't be a problem as we will surely be able to get access to the money no matter how right?

Regarding the claiming back on March next year, the form we are going to fill is a "lite" version as I read. Does it mean we just fill in solely because of 3a account or do we need to state things like other global income? (hence risk to pay more than tax at source...:-)? Is it the same form for claiming back the Verrechnungssteuer for normal interest of saving account?

Thanks.
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Old 01.11.2009, 19:57
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Re: 3rd pillar - Any reason to wait till December?

The 3a refund for emigrants is usually fast and painless. Prerequisites are:
  • Attestation from your Swiss commune (where you resided) that you have de-registered.
  • Proof of residence and address in your new country.
  • Married persons may be required to get their spouses to sign-off on liquidation.
You should get your money, within a week, after deducting withholding taxes.
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Old 03.03.2011, 02:25
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Re: 3rd pillar - Any reason to wait till December?

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You should get your money, within a week, after deducting withholding taxes.
it should be about 5%, right?
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Old 03.03.2011, 06:59
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Re: 3rd pillar - Any reason to wait till December?

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I pay my 3a contribution in January. Thus benefit from the higher interest rate, which is also tax free.
Do you mean you benefit for longer (ie Jan-Dec) from a higher interest rare in 3rd pil?

As an aside if you don't pay tax at source you are still better off paying monthly tax contributions to the government as the interest the give is usually higher than banks and you don't pay any tax/interest on late payment.

Also, back to 3 pil., if you are going to be here for a while you need to set up several different third pillar accounts - they can even be in the same bank. This is because you cannot withdraw portions of an account, it is all or nothing. So withdrawing 25k in one year, 25k the next etc, is better than having to withdraw e.g. 100 k in one year vs 25k over 4.

I mention 25k as my mortgage advisor indicated that this was around a tipping mark where the tax bracket increased so you paid more tax on withdrawl. I've not confirmed this separately.
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Old 03.03.2011, 11:16
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Re: 3rd pillar - Any reason to wait till December?

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it should be about 5%, right?
from what I heard - depends on: canton, the years spent in Switzerland & the total amount
so varies from 2% to 8%
people say that if the amount is significant maybe worth moving the assets _before_ the departure to a good canton (like Zug) with a low WHT rate (around 2%)
there are companies there that offer such services
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