Oh, I know what you are about to say!
“But Noé, if I opened a third pillar account, it was specifically to save on taxes, not to delay them until I retire!”
I know, I know. But the taxation of the third pillar is below the usual rates. The more your assets are important, the more the tax rate increases, but I will be capped at 15% of the total amount (should you have a big, big capital).
If I withdraw 50,000 CHF, I will have to pay 1,500 CHF (CHF) in taxes as a single person. If by then I find my soulmate, I will pay a third, to be precise 500 CHF. If I withdraw double the amount, that is 100,000 CHF, I will have to pay more than double in taxes: 4,700 CHF (4,7%) as a single person and 3,200 CHF as a married person.
Taxes, as you probably have understood by now, is calculated based on the amount withdrawn. actually, the third pillar is considered as a special revenue and is therefore taxed on the basis of the scale for income tax but with an exceptionally reduced scale (about 1/5th).
Let’s take my friend Noa as an example, over the years, he salvaged a capital of 200,000 CHF at a bank. He still does not have a wife or kids and will be taxed in his commune and canton of residence: Lausanne / Vaud.
So indeed, paying almost 20,000 CHF in taxes is huge but it is nothing compared to what he will have saved each year.
With this taxable income before his 70,000 CHF contribution to the third pillar he will have saved, thanks to the 5,000 CHF he carefully put aside each year on his 3A account: 2,188 CHF in taxes every year!
Which means that over the course of 40 years, he will have saved: 87,520 CHF and will end up paying 19,870.70 CHF.
And this is not even the only advantage of this third pillar! On top of being a tax-deductible income during the contract validity period, you NEVER have to declare it as an asset until you withdraw it.