Tax advice


Subsequent payments into the pension fund can be fully deducted from the income tax.

These subsequent payments can be divided into mandatory and supplementary payments. The mandatory payments guarantee a minimum interest rate while the supplementary payments do not.
There are restrictions for foreigners in the first five years of immigration: in the first five years the subsequent payments can amount to a maximum of 20% of the pension fund insured income.

Contributions to the pension fund can be made until the funds can be withdrawn. The age limit is five years after the regular retirement age, provided that an income is earned and the pension fund informed of this possible extension.

Pension fund: Most of the pension funds allow capital withdrawals in cases of

  • purchase of home ownership
  • amortisation of the mortgage
  • beginning of self-employment
  • relocation out of Switzerland
  • retirement

Restrictions on capital withdrawals from the pension fund

  1. Relocation out of Switzerland
    If you move to a EU country only the supplementary part of the premium payments can be withdrawn.
  2. Purchase of home ownership
    The pension fund regulations can restrict the amount that can be withdrawn, especially after the age of 50.
  3. Self-employment
    With increasing age, one has to be decide whether the funds from the pension fund should be used for self-employment; many have taken this risk and have lost their entire fund leaving them with only their AHV pension at the age of 65.
  4. Retirement
    The whole capital or only parts of it can be withdrawn. This has to be carefully contemplated as the lifelong pension including education and spouses’ pensions are often more beneficial.

If subsequent payments are made in the last 36 months before they can be withdrawn, the will be taxed at the regular tax rate when they are withdrawn.

The capital withdrawal has lower tax rates than the payments. Substantial tax savings can be made between the saved taxes on the payments and the owed taxes at the withdrawal.