Kapitalbezugssteuer (Withdrawal Tax)

Kapitalbezugssteuer (capital withdrawal tax) is a special tax levied when you withdraw retirement funds as a lump sum from Pillar 2 (BVG) or Pillar 3a accounts in Switzerland. Unlike regular income tax, it's calculated separately at privileged (lower) progressive rates that vary significantly by canton. The tax is deducted at source when the capital is paid out, and you cannot claim deductions against it.

For 2026, withdrawal tax rates are highly canton-dependent, ranging from approximately 2-10% depending on the withdrawal amount and canton. For example, a CHF 500,000 withdrawal might be taxed at 4-6% in Schwyz (low-tax canton) but 8-12% in Geneva (high-tax canton). Multiple withdrawals in different years can reduce overall tax burden through progressive rate brackets. The tax is separate from regular income tax and doesn't affect your annual tax rate.

Real-World Example If Andreas withdraws CHF 400,000 from his Pillar 2 and CHF 150,000 from Pillar 3a (total CHF 550,000) in Zurich, the withdrawal tax is approximately CHF 35,000-40,000 (6-7% effective rate). If he splits withdrawals—CHF 400,000 in year 1, CHF 150,000 in year 3—he saves approximately CHF 8,000-12,000 due to lower progressive rates on smaller amounts.