Taxation of lump sum payment 2nd pillar and pillar 3a in Switzerland
In the case of cash payout (lump sum payment) at the retirement age or an early withdrawal (acquiring property for personal use or becoming self-employed), the saved retirement assets are subject to taxation at the federal, cantonal and municipal level. The rate is defined by your tax residency.
Taxation of lump sum payment 2nd pillar and pillar 3a abroad
In the case of a cash payout (lump sum payment) at the retirement age or an early withdrawal when living outside Switzerland, the saved retirement assets are subject to taxation at the federal, cantonal and municipal levels. The rate is defined by the location of the pillar 2 or 3a provider/foundation. Double taxation agreements have been concluded with some countries to have this tax refunded.
The BVG minimum retirement assets (compulsory part of your termination benefit) are not paid out in cash, but are kept in Switzerland until the insured person can use them at retirement age. The insured person can only receive this retirement capital in cash if he is not subject to the pension scheme (social security) of the new country of residence.
However, the insured person receives the amounts contributed to the excess portion of the termination benefit, i.e. the benefits paid out above the statutory BVG contribution portion.