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Retirement

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In Switzerland, contributions to the pension fund are deducted from taxable income and are therefore not taxed. This is done automatically via declaration in the salary statement. Taxation only takes place when benefits are paid out as a result of retirement, in the event of an advance payment for home ownership promotion or a cash payment upon resignation.

As a result, you benefit from a tax deferral during your working life and later — in retirement — from a more favourable taxation of the old-age pension. This is because the tax rate is usually lower after retirement due to reduced income.

Taxation of pensions

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In Switzerland, 100% of the pension fund pension is taxed as income every year — this together with other income.

At the end of January, we automatically send you the pension certificate for the previous calendar year by post. You need this as proof for your tax return.

Taxation of capital withdrawals

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In Switzerland, the lump-sum withdrawal from the 2nd pillar is taxed once at due date — separately from other income and at a lower tax rate. In this regard, please note:

To determine the tax rate, all withdrawals of pension capital from the 2nd and 3rd pillars in the same calendar year are added together. This can be a financial disadvantage if your canton of residence applies a progressive rather than a linear capital tax rate. Because with progressive taxation, the higher the capital withdrawal amount, the higher the tax rate. It is therefore worthwhile to check whether payouts can be received in stages over different calendar years. Thanks to the integrated tax calculator, you can calculate the tax amount on your lump sum yourself without obligation in our web portal.
If you retire on 31 December, 1 January of the following year is the due date for the lump-sum withdrawal from the pension fund.
The reduced pension tariff at the federal government is 20% of the normal tax rate. In the case of the canton and municipality, the amount of tax depends on the place of residence and the actual payout amount.
This special taxation also applies to survivors who receive survivors' benefits in the form of a death benefit.

Pension funds are required by law to immediately pay out any lump sum to the Swiss Confederation. Report the tax administration. As a result, you will normally receive the separate tax bill from the tax authority in your canton of residence within a few weeks of the lump-sum withdrawal.

Withholding tax for persons residing abroad

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If you live abroad at the time of payment or are no longer registered in Switzerland, we must make a withholding tax deduction, depending on the type of benefit and country of residence:

Withholding taxes are normally deducted from pensions only if Switzerland has not concluded a double taxation agreement with the country in which you live. A list and further information can be found on this Federal website.
If a lump-sum is withdrawn from the 2nd pillar, withholding tax is deducted in any case. Taxation takes place in the canton in which the pension fund is based — in the case of TRANSPARENTA, i.e. the canton of Basel-Landschaft. Depending on your country of residence, you can apply for a refund of withholding tax from the tax administration of the Canton of Basel-Landschaft. In the event of a lump-sum withdrawal, we will send you the required refund form including the information sheet.

Tax certificate for German cross-border workers

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If you reside in Germany and are actively insured with a Swiss pension fund for occupational benefits, you will need a breakdown of contributions by compulsory and supercompulsory as well as by employee and employer for your tax return. As a pension recipient, you must indicate the breakdown of the current pension into compulsory (BVG) and supercompulsory.

Insured persons with TRANSPARENTA residing in Germany will receive the corresponding certificate from us by post by the end of January for the previous calendar year.

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Calculate the expected tax costs of a pension or capital withdrawal free of charge in our web portal (information provided without guarantee).

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