On Nov. 6, SWI GVT introduced possibility of making pillar 3a buy-ins.
SWI GVT stated that persons who have not made any payments into their linked individual pension provision (pillar 3a) in certain years or who have only made partial payments will be able to pay these contributions later in the form of buy-ins.
At its meeting on Nov. 6, 2024, the Federal Council took note of results of consultation and approved amendments to Ordinance on tax deductions for contributions paid to recognised forms of pension provision (OPP 3), coming into force Jan. 1, 2025.
Persons exercising a gainful activity who have not paid the maximum authorized contributions into their pillar 3a each year will have possibility of paying retroactively for up to 10 years and of deducting these buy-ins from their taxable income.
A buy-in into pillar 3a up to the amount of the small contribution (ie. 7,258 francs in 2025) will be authorized each year, in addition to the ordinary contribution.
To be able to make a buy-in, a person must have been entitled to pay contributions into pillar 3a during the year for which they intend to pay contributions retroactively.
They must also meet this condition during the year in which they make the buy-in and have, in fact, paid the entire ordinary contribution for the year in question.
The new provisions provide for specific rules to ensure the legality of buy-backs and to enable their monitoring, in particular for checks by the competent tax authorities.
Financial Consequences
In initial estimate, will result in reduction in tax revenues of around 100 to 150 mn francs for direct federal tax, of which 21.2 mn for cantons, 78.8 mn for Confederation.
For cantonal, communal income taxes, revenue reduction estimated at 200-450 mn.
Federal Council decided on Sep. 20 2024 to adapt elements of preferential taxation of the 2nd and 3rd pillars, based on the recommendations of the relevant expert group.
Federal Council will probably present modalities for future tax treatment of capital withdrawals from 3rd pillar at the end of Jan. 2025 as part of the consultation project.
Also concerns taxation of capital withdrawals from buy-ins taxpayers can now make.
