On 29 May 2020, the Conference of Cantonal Finance Directors (FDK) published a statement on the consultation process for the Federal Act on the Taxation of Life Annuities and Similar Forms of Provision.
The deal concerns the implementation of motion 12.3814 of the FDP-Liberal Group "Stop the tax penalty in pillar 3b. In the case of capital withdrawals, tax the share of income instead of the capital contribution", which instructs the Federal Council to submit to parliament an amendment to the Federal Tax Act (DBG) and the Tax Harmonisation Act (StHG) so that in the case of surrenderable pension insurance policies under pillar 3b, the surrender sum (during life) and the premium refund (after death) are taxed at the actual share of income (departure from the improper 40 percent rule).
The Council of States had accepted the motion with an amendment that instructs the Federal Council to submit to parliament an amendment to the Federal Tax Act (DBG) and the Tax Harmonisation Act (StHG) in order to achieve greater flexibility in the flat-rate share of earnings on all benefits (periodic benefits, surrender, refund) from life annuities and life insurance policies, adapted to the respective investment conditions.
The National Council had also adopted the amended motion.
The FDK agrees in principle to the proposal, but introduces an additional proposal for amendment with regard to Art. 22 para. 3bis of the Draft Federal Constitution Act and Art. 7 para. 2bis of the Federal Constitution Act. The articles in question should be amended to the effect that the income component calculated at the time of conclusion of the contract or the start of the annuity is valid for the entire duration of the contract.
The statement of the FDK is available here.
