3rd pillar and B permit ?

More and more expatriates are working in Switzerland on a permanent basis. In addition to cross-border workers who have a G permit to work on Swiss soil, other workers initially benefit from a residence permit valid for 5 years, the B permit.

The B license is renewable and can be changed to a long-term license (C permit). The residents concerned are therefore increasingly interested in the possibilities offered for the establishment of 3^th tax-efficient pillar.

The reflection

First, it is useful to know your life goals in Switzerland, the length of time that will allow you to reach them and also your budget.

As expatriates, it is not always easy to know the length of stay in Switzerland. However, visualizing your objective makes it possible to find appropriate solutions in terms of pension provision.

There are many ways to think about, but the most frequent are:

• The tax savings achieved every year thanks to the 3^th Pillar A or B
• Your savings for your retirement
• The acquisition of real estate in Switzerland or abroad
• Family protection in the event of death
• Coverage in case of disability due to illness or accident
• Investing in order to generate performance or rather prioritize safety?

The solutions of 3^th pillar for B permits

The B license opens up a number of solutions for 3^th banking or insurance pillars and allows you to benefit from the advantages granted by pension provision.

In your particular case, in addition to selecting and choosing your 3^th As a pillar, flexibility for a future that may be in flux remains very important.

For banking solutions, there is no problem in terms of flexibility. Indeed, these solutions consist in putting savings only in the amount you want, when you want. You therefore have no constraints, but also no possibility of continuing the solution in the event of departure from Switzerland and no coverage in the event of death or disability.

For insurance solutions, you must stick to the premium contractually defined in the contract. The possibilities offered by flexible insurance companies are becoming greater and greater. There are options to temporarily suspend the payment of the premium, to reduce or increase the premium or to continue to keep your 3^th pillar abroad. Insurance coverage in the event of death and disability should also be taken into account in the possibilities offered by these solutions.

Choose your personal solution via our online comparator.

This comparator will allow you to follow your path simply and effectively through an application that will guide you in your choice according to your needs.

Once your choice has been defined, your comparison will be created on the best solutions on the market in line with your selection.

Afterwards, advice based on your personal choice will allow for the final adjustments and procedures in order to be as close as possible to your desires and needs.

The constraints of companies

Some institutions limit their offer to holders of B permits. However, those who have a license are few and the number of possible institutions remains very interesting.

Companies limit certain coverage to Swiss territory and/or request authorization to continue coverage depending on the country of destination. These constraints are limited and you keep a very broad range of coverage.

Tax constraints for B license holders

Since the year 2021, the conditions for the tax deduction of the 3^th Pillars A or B of your taxable income have changed Indeed, it is no longer enough to correct your tax at source in order to deduct your 3^th pillar, but you have to do a subsequent ordinary taxation.

This subsequent ordinary taxation (TOU) is mandatory if your income is greater than CHF 120,000 per year, if you are married to a person who meets the subsequent ordinary taxation or if you have taxable assets. If it is not mandatory, it is necessary to check whether it is advantageous. Indeed, once the TOU has been chosen, you cannot go back, even if the taxation is higher than with withholding taxation.

There are several scenarios:

• TOU is advantageous even without 3^th Pillar and the 3^th Pillar decreases taxation even more
• TOU is disadvantageous and even a 3^th pillar does not compensate for the increase, so there is reason to do nothing at all
• The TOU is disadvantageous but the fiscal savings of the 3^th Pillar lowers your taxation, you need to choose the right amount injected into the 3^th pillar in order to achieve this advantage

A calculation of your taxation by choosing TOU is therefore necessary.

Get good advice!