Repayment of Pension Assets within the Three-Year Period after Purchase as Abusive Tax Minimization

Facts

The appellants A. and B.C. were employed as chief physician and spouse, respectively, until 2011. In 2009, they made a purchase of CHF 150,000 into the occupational pension with the AXA Foundation Winterthur. In December 2011, they withdrew the pension assets of CHF 874,845 from the pension foundation of the Association of Leading Hospital Physicians of Switzerland (VLSS) in the form of a lump-sum payment. The tax authority reversed the deduction of the CHF 150,000 purchase, as it constituted an abusive tax minimization.

The Administrative Court of the Canton of Schwyz confirmed this tax assessment. The appellants appealed the decision to the Federal Supreme Court.

Considerations

The Federal Supreme Court upholds its established case law, according to which the deduction of purchases into the occupational pension is to be denied if they are made in close temporal proximity to a capital withdrawal and do not serve to improve pension coverage, but rather to minimize taxes.

The decisive factor is that the purchase was made shortly before the payout of pension capital, so that the back and forth of the funds does not appear to be a reasonable improvement of the pension coverage, but rather a temporary and tax-motivated transfer of funds.

It is irrelevant whether the purchase and the…