If you live in Geneva or Fribourg, you will be able to benefit from an advantageous tax deduction for your 3rd pillar B! We explain everything to you in this article.
What is the 3rd pillar B?
THE 3rd pillar B, also known as free foresight 3b, is an individual savings solution which allows you to prepare financially for retirement while benefiting from flexibility in terms of payments, withdrawal of capital and beneficiaries in the event of death.
Unlike the 3rd pillar A, the 3rd pillar B is not limited by strict legal constraints in terms of payment amounts and use of the accumulated capital.
Differences between the 3rd pillar A and B
The main difference between the 3rd pillar A (linked) and the 3rd pillar B (free) lies in taxation and flexibility. THE 3rd pillar A offers direct tax advantages in the form of deductions from taxable income for all Swiss residents, while the tax advantages of the 3rd pillar B depend on the specific regulations in each canton.
The 3rd pillar B offers greater flexibility in terms of choice of beneficiary and time of capital withdrawal, making it suitable for varied life projects.
Tax deduction with the 3rd pillar B: how does it work?
Unlike the 3rd pillar A, for which the tax deduction is governed by a unified federal law, tax deductions for payments into the 3rd pillar B are subject to cantonal legislation. This means that tax benefits can vary considerably from canton to canton, ranging from significant deductions to almost non-existent advantages.
Special case of the cantons of Geneva and Friborg
Residents of the cantons of Geneva and Friborg benefit from favorable regimes in terms of tax deduction for their contributions to the 3rd pillar B.
These two cantons allow taxpayers to deduct the amount of their annual payments in the calculation of their taxable income, thus offering a substantial financial incentive for preventive savings.
Amount of tax deductions for the 3rd pillar
Canton of Geneva
Single person
In Geneva, a single person can deduct up to CHF 2,196 or 4,434 for a self-employed person from their annual taxable income by contributing to a 3rd pillar B.
Married couple/registered partner
For a married couple or registered partners, the deduction can be up to CHF 6,652 if both spouses are self-employed, providing a significant tax savings opportunity.
With children
The presence of children further increases the deductible amount, up to CHF 1,814 per child for self-employed couples, making it possible to substantially reduce the tax burden on families.
Canton of Friborg
Single person
In the canton of Fribourg, contributions to the 3rd pillar B allow a deduction of CHF 750 for a single person, thus promoting individual savings.
Married couple
For a married couple, the deduction doubles, reaching CHF 1,500, which allows families to maximize their tax savings.
You can contact Finwise Assurances for advice and recommendations depending on your situation to maximize your benefits according to the legislation of your canton.
Optimal Strategies to Maximize Your Benefits
To maximize the benefits of the 3rd pillar, it is crucial to determine the best between 3rd pillar A and B depending on your personal situation.
This involves considering your canton of residence, your professional status (employed or self-employed), as well as your long-term objectives. You can count on the Finwise Assurances team to help you evaluate the different options and choose the one that maximizes your tax deductions and best meets your flexibility needs.
One strategy (often used) is to combine 3rd Pillar A and 3rd Pillar B. This approach can offer both the tax benefits of Pillar A and the flexibility of Pillar B. For example, you can pay into Pillar A up to the tax deduction limit, then place any excess into Pillar B, thus benefiting from both the tax savings and more flexible access to your savings.