LPP: exit strategy from the second pillar (cross-border guide)

Context

In short - The withdrawal of the second LPP pillar for frontier workers is an important issue for those working in Switzerland. - Switzerland and Italy have signed an agreement to avoid double taxation. - Frontier workers can opt for the transitional regime 2024-2033 or for the deductible. ## Key facts - What: picking up the second LPP pillar for border workers. - When: 1 January 2024. - Where: Switzerland and Italy. - Who: frontier workers. - Amount: not specified. The levying of the second LPP pillar for frontier workers is an important issue for those working in Switzerland. Switzerland and Italy have signed an agreement to avoid double taxation. ## Exit strategy from the second pillar Switzerland has established a transitional regime for frontier workers working in Switzerland who have contributed to the second pillar of the pension system. This regime was established to allow frontier workers to choose between two options: the transitional regime 2024-2033 or the deductible. # ## Transitional regime 2024-2033 The transitional regime 2024-2033 was established to allow frontier workers to continue contributing to the second pillar of the pension system without having to pay the full amount. The scheme provides for frontier workers to pay a reduced amount of contribution, which will be determined according to their income and age. For example, a frontier worker earning 60,000 francs a year who is 40 years old will have to - Choosing to opt for the deductible may exempt a frontier worker who earns 80,000 francs per year and who is 50 years of age from paying contributions to the second pillar of the pension system. # ## Conclusions In conclusion, the levying of the second LPP pillar for frontier workers is an important issue for those working in Switzerland. Switzerland and Italy have signed an agreement to avoid double taxation and border workers can opt for the transitional regime 2024-2033 or for the exemption. It is important to consider the options available and choose the one that best suits your needs.

Operational details

LPP: exit strategy from the second pillar

The withdrawal of the second LPP pillar for frontier workers is a complex issue that requires an optimal exit strategy. Border workers must consider the tax and financial implications of the levy and choose the strategy that best suits their needs.

What is LPP second pillar picking?

The LPP second pillar levy is a mandatory tax for Swiss border workers who have not contributed to the Swiss pension system. The share of the levy is calculated on the basis of income and the number of years of residence in Switzerland. According to the federal law of 15 December 2010, frontier workers must pay a share of 1.2% of their annual income.

Picking setup

The withdrawal of the second LPP pillar is set based on the annual income of border crossers. The share of the levy is calculated on the basis of income and the number of years of residence in Switzerland. For example, if a frontier worker has an annual income of CHF 50,000 and has resided in Switzerland for 5 years, the levy on the second LPP pillar would be CHF 300 (1.2% of CHF50,000).

Exit Strategies

Border guards should consider the following exit strategies to minimize the withdrawal of the second LPP pillar:

• Income planning: Border crossers can plan their income to reduce the share of the levy. For example, they can transfer some of their income to a bank account in Switzerland for

Useful planning tools

To estimate your pension strategy, use the pension planner and the pillar 3 simulator.

Key points

LPP: exit strategy from the second pillar

The second pillar levy (LPP) is a mandatory tax for border workers in Switzerland, which comes into force from 2024. Border crossers can opt for the transitional regime 2024-2033 or for the exemption to avoid the levy. It is important to consult a tax advisor or lawyer to determine the strategy that best suits your needs.

The transitional regime 2024-2033 is an option for border workers who wish to continue working in Switzerland but do not wish to pay the second pillar levy. This scheme involves paying a tax of 15% on the income received in Switzerland, instead of the 20% provided for the withdrawal of the second pillar. For example, if a border worker receives an income of CHF 100,000 in Switzerland, he will pay a tax of CHF 15,000 (15% of CHF 100,000) instead of CHF 20,000 (20% of CHF 100,000).

The deductible is another option for border crossers who wish to avoid the withdrawal of the second pillar. The deductible is a maximum amount of income that can be received without paying the second pillar tax. In 2024, the deductible is CHF 80,000. This means that if a border worker receives an income of CHF 80,000 in Switzerland, they will not pay the second pillar tax. However, if you receive an income above CHF 80,000, you will pay 20% tax on the income above CHF 80,000.

It is important to note that frontier workers can

Evaluating a Ticino job offer? Simulate your net payslip: enter gross salary, marital status and municipality for a detailed breakdown.