If you are liable for tax in Switzerland and withdraw money saved from your pension plan, you will be subject to a tax: the lump-sum payment tax (also known as capital tax or capital withdrawal tax). It is levied on pension payments and taxes both capital benefits from occupational pension provision (2nd pillar and vested benefits) and benefits from tied pension provision (pillar 3a).
Capital payment tax is not only payable when you retire and have your capital paid out, but also when you make an early withdrawal for home ownership. But the good news is: if you “pay” this money back into the pension fund, you get the lump-sum payment tax back. A really nice touch, thank you!
Important: Capital payment tax is calculated independently and separately from your taxable income. It therefore doesn’t matter how high your taxable income is in the year you withdraw the capital.
How high is the capital payment tax?
A reduced rate is applied for federal tax purposes for lump-sum payments from pension plans. This is also the case in all cantons. And of course your municipality and the church also receive their share of the capital tax.
The amount of capital withdrawal tax you have to pay depends on your place of residence. The tax authorities add up all withdrawals of pension assets from the pension fund, vested benefits account and pillar 3a made in the same tax year. The total amount then determines the tax rate. Most cantons tax lump-sum payments at between 5 % and 10 %. This is many times less than the marginal tax rate on your income. This is usually between 25% and 40%.
You can compare the capital payment tax on pension benefits with the income tax on your salary. Like income tax, it is progressive in most cantons. Tax progression means that a higher tax rate applies to higher pension assets than to lower pension assets. So if you withdraw CHF 100,000, the tax is more than twice as high as if you withdraw CHF 50,000. In short: the more you withdraw in one year, the higher your tax rate will be.
You can therefore optimize your tax burden with early planning. For example, by preparing and implementing a staggered withdrawal over several years.
How high is the capital payment tax in my canton?
The amount differs not only according to the amount received, but also according to the canton and place of residence in the canton. For example, only 2.60 % tax is levied on CHF 100,000 in Appenzell Innerhoden, the cantonal capital, and 5.09 % on CHF 500,000. Basel-Stadt, on the other hand, taxes the same amount at 9.4 %. The low-tax canton of AI is followed by Nidwalden and Schaffhausen in 2nd and 3rd place.
Which place of residence determines the amount of capital gains tax?
You must file your income tax return where you live at the end of the year. But which place is decisive for determining the capital withdrawal tax? After all, the cantons have different procedures for determining capital withdrawal tax. In 2014, the law was amended so that lump-sum withdrawals from the second pillar and pillar 3a are taxable where you live as a taxpayer at the time you receive the benefit.
How can I calculate the capital withdrawal tax?
The Federal Tax Administration provides a free tax calculator for capital withdrawal tax. You can use it to easily calculate the lump-sum withdrawal tax on pension benefit payments in less than a minute.
Last update: 03.10.2024 14:05
