Switzerland: Reduced tax on withdrawals of pension capital (Zurich)

Zurich reduced the rates of tax on withdrawals of pension capital

Zurich reduced the rates of tax on withdrawals of pension capital

The governing council of the Canton of Zurich reduced the rates of tax on withdrawals of pension capital.  

Effective 1 January 2022, lower tax rates will be applied by the canton for a pension capital withdrawal (e.g., a withdrawal from occupational pension plans or from private pension schemes). However, the tax will depend on the taxpayer’s personal situation (single / married, religious affiliation, etc.) as well as the place of residency.

Beginning 1 January 2022, the tax rates in the Canton of Zurich for a pension capital withdrawal between CHF 125,000 and CHF 1 million will be reduced:

  • For a single taxpayer—between 5.2% and 11.5% (reduced from 16.1%)
  • For married taxpayers with no religious affiliation—between 4.9% and 8.5% (reduced from 13%)

KPMG observation

Given that the taxable event for pension capital withdrawal is the cashflow at withdrawal, taxpayers may decide to wait until 1 January 2022 to benefit from the adjustment to the Zurich tax law.

Read a December 2021 report prepared by the KPMG member firm in Switzerland

 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.