Pension funds are obliged to directly deduct (at source) a tax for certain categories of person and to transfer it to the relevant tax authority.

Withholding tax is payable by persons drawing a pension who

• draw their pension from the 2nd pillar or persons who are paid a lump sum from the 2nd pillar;
• receive their pension based on a previous public-sector employment contract from an insurance institution with its registered office in the canton of Bern;
• at the time of the payment do not (any more) have a domicile or place of residence in Switzerland as recognised under taxation law. The decisive factor here is the date of deregistration at the previous place of residence.

Liability to pay withholding tax also exists if these benefits are transferred to a Swiss account. A person can be exempted from withholding tax if

• he or she lives in a country which has signed a double taxation agreement (DTA) with Switzerland with terms to that effect. A DTA avoids the need to tax the same income or assets in two locations.
• the pension (total per calendar year) amounts to less than CHF 1,000 and the lump sum payment totals less than CHF 5,000 (total per calendar year).

The withholding tax payable on pensions from the 2nd pillar amounts to 10% of gross benefits.

In its capacity as debtor for taxable benefits, Livica is liable to pay withholding tax. We are legally obliged to clarify everything required to ensure the correct collection of taxes. We meet this obligation by periodically checking the place of residence. If we discover that a person drawing a pension has transferred his or her place of residence abroad and failed to inform us, a temporary pension reduction will automatically be imposed. The pension reduction commences once we find out that the person in question is residing abroad. The following will be deducted: the withholding tax amount owed since settling abroad until we found out about it and the normal withholding tax amount which is subsequently deducted from the pension payment on a monthly basis.

We would like to point out to you that intentionally or negligently not paying withholding tax constitutes the offence of tax evasion. That is why it is indispensable for Livica that after moving abroad or moving to a different place abroad while living abroad, you ask your commune of residence to provide written confirmation of your new place of residence within 10 days of the moving date.

Do you live abroad but have not yet notified us of your new address?
Then please do so immediately! Many thanks!