Withdrawal for leaving Switzerland to an EU country

My vested benefits account is in Zurich.

I understand that it is possible to withdraw the whole amount and/or use part of the amount for paying an existing mortgage (not in Switzerland). Is it really so?

How the withholding tax for lump sum benefits is calculated?

Thank you!

Hi antkantz,

Whether or not you can withdraw your vested Swiss pension fund benefits, and for which purpose, depends on your age and which country you live in.

EU/EFTA countries:

• You can always withdraw the voluntary portion of your benefits simply because you do not live in Switzerland. You may have voluntary benefits if you made additional contributions to your pension fund to close gaps, or if your employer contributed more than the compulsory pension fund contributions. You cannot withdraw the compulsory portion of your benefits simply on account of living outside of Switzerland.
• You can withdraw all or part of your compulsory vested benefits early for the purpose of financing a primary residence in the country you live in. You can find detailed information in the guide to using Swiss retirement savings to finance a home.
• You can always withdraw your vested benefits in full 5 years or less before Swiss retirement age. That means you can withdraw your benefits if you are 60 years old or older.

All other countries:

• You can withdraw your vested benefits in full, simply on account of living in a country that is not in the EU or EFTA.

In every case, the vested benefits foundation will deduct a Swiss withholding tax from your benefits before they are paid out.

Important: Swiss withholding taxes vary between cantons. Your benefits will be taxable in the canton that the vested benefits foundation is in. Some cantons have much higher withholding taxes than others, so it is advisable to open a new vested benefits account in a canton that has low withholding taxes. Schwyz currently has the lowest withholding tax. The canton of Zurich, on the other hand, has a relatively high withholding tax.

If you live in an EU or EFTA country, you can reclaim the Swiss withholding tax by showing proof of tax residence in the EU or EFTA country. You will generally also be required to provide proof that your benefits have been declared in your country of residence. 

If you live in a country that is not in the EU or EFTA, then you cannot reclaim the Swiss withholding tax.