Purchases into pillar 3a should be possible retrospectively
Published: Wednesday, Nov 22nd 2023, 11:31
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In future, it should be possible to close contribution gaps in pillar 3a through subsequent purchases. The Federal Council submitted a corresponding amendment to the ordinance for consultation on Wednesday. The new regulation could reduce tax revenue by up to CHF 600 million.
The new regulation is intended to strengthen individual pension provision, as announced by the federal authorities. If no or not the maximum permissible contributions have been paid into pillar 3a, the resulting contribution gaps can be compensated retroactively for up to ten years through tax-deductible purchases.
Anyone wishing to make a purchase must be entitled to make contributions to pillar 3a in that year, i.e. have earned income subject to AHV contributions in Switzerland. A purchase requires that the ordinary annual contribution is paid in full in the year in question. Like the ordinary annual contribution, the purchase should be fully deductible from taxable income.
According to the 2019 tax statistics for direct federal tax, around ten percent of taxpayers claim the maximum annual deduction permitted for tax-privileged personal pension provision.
According to a rough estimate, the new regulation is expected to result in an annual reduction in direct federal tax revenue of CHF 100 to 150 million. Just over a fifth of this will fall to the municipalities and the rest to the federal government.
According to a rough estimate, income tax revenues for the cantons and municipalities are expected to fall by between CHF 200 and 450 million per year.
The consultation will last until March 6, 2024.
©Keystone/SDA
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