rueckkehr-schweiz-deutsche-rente

Germany–Switzerland · Retirement

German statutory pension · Swiss residence

Returning to Switzerland with a German pension

If you return to Switzerland after working in Germany and receive a German statutory retirement pension, you need to distinguish between German domestic tax law and the Germany–Switzerland double taxation agreement. Germany generally treats pensions paid by Deutsche Rentenversicherung as German-source income. Under the treaty, however, a German statutory social security pension is generally taxable in Switzerland when the recipient is resident there. The year of the move, treaty residence, Swiss tax reporting and any special treaty provisions must also be reviewed.

Basic principle

A German pension, but generally Swiss taxing rights

Your entitlement to a pension from the German statutory pension insurance scheme, Deutsche Rentenversicherung, generally continues after a permanent move to Switzerland. A German statutory pension can generally be paid to a recipient living in Switzerland.

For tax purposes, however, two levels must be distinguished. Under German domestic law, a pension paid by a German statutory pension insurance institution generally constitutes German-source income for a person subject to limited German tax liability.

The Germany–Switzerland tax treaty limits these German taxing rights. Under the interpretation recognised between Germany and Switzerland, German statutory social security pensions generally do not fall under the ordinary pension article. Instead, they fall under the treaty’s residual provision for other income.

The Swiss perspective

This page focuses on German tax law and the tax treaty. TaxRep Switzerland covers the specific Swiss reporting requirements and cantonal tax consequences from the Swiss perspective.

Swiss perspective (German)

Germany–Switzerland tax treaty

German statutory pensions generally do not fall under Article 18

Article 18 of the Germany–Switzerland tax treaty covers pensions and similar remuneration for past employment.

Germany and Switzerland have long taken the view that pensions from their statutory social security systems are not classified as pensions within the meaning of Articles 18 and 19 of the treaty.

German statutory pension insurance benefits therefore generally fall under Article 21. If the pension recipient is resident in Switzerland, taxing rights generally belong to Switzerland as the state of residence.

  • Deutsche Rentenversicherung forms part of statutory social security
  • Article 18 generally does not apply
  • The residual provision in Article 21 generally applies
  • Swiss treaty residence generally means Swiss taxation
  • The treaty limits Germany’s domestic taxing rights

The type of pension is decisive

A German statutory retirement pension, a German occupational pension and a civil-service pension may be governed by different treaty provisions. The statement that a German pension is taxable in Switzerland must therefore not be applied to every German retirement benefit without review.

German domestic law

Without the treaty, a German statutory pension would remain German-source income

If a person has neither a residence nor a habitual abode in Germany after moving, unlimited German income tax liability generally ends.

Certain German-source income may nevertheless remain subject to limited tax liability. Section 49 of the German Income Tax Act (EStG) expressly covers income from pensions and other benefits paid by German statutory pension insurance institutions.

For a pensioner resident in Switzerland, the treaty must then be applied. To the extent that it assigns exclusive taxing rights to Switzerland, Germany generally may not exercise its domestic taxing rights.

Level Result for a German statutory pension
German Income Tax Act A German statutory pension generally constitutes German-source income under section 49 EStG
Germany–Switzerland tax treaty Taxing rights generally belong to Switzerland where the recipient is resident there
Practical consequence German taxation is generally excluded by the treaty

Swiss income tax

German statutory pensions are generally included in full in Swiss taxable income

When a person becomes tax-resident in Switzerland after returning, an ongoing German statutory social security pension generally forms part of their Swiss taxable income.

From the Swiss perspective, German statutory retirement pensions are comparable to Swiss AHV/IV benefits. They are generally included as pension income for direct federal tax as well as cantonal and municipal taxes.

Unlike the German system, in which the taxable percentage depends on when the pension began, Switzerland generally does not apply the German pension tax-free allowance model to a German statutory pension.

The German pension tax-free allowance does not move to Switzerland with you

A pension that is partly tax-free in Germany is not automatically taxable only to the same extent in Switzerland. The Swiss tax base is determined under Swiss tax law.

German retirement benefits are not all the same

Distinguish statutory, occupational and public-service pensions

DRV

Statutory pension

Benefits from Deutsche Rentenversicherung: Article 21 generally applies, with taxing rights generally belonging to Switzerland for Swiss residents.

OCC

Occupational pension

Benefits arising from former private-sector employment may fall under Article 18. The particular pension arrangement must be reviewed.

PUB

Public-service pension

Civil-service and other public-service retirement benefits may fall under Article 19, resulting in entirely different taxing rights.

Benefit Typical treaty review
German statutory retirement pension Article 21 generally applies
German reduced earning capacity pension Statutory social security benefit; classify separately
German survivor’s pension Statutory social security benefit; classify separately
Private-sector occupational pension Generally review Article 18
Civil-service pension Review Article 19
Private pension insurance Classify the product and type of benefit independently

The year of return

Pension payments may fall under different tax regimes during the year of the move

If a pensioner moves from Germany to Switzerland during a calendar year, the first step is to establish when German residence was actually given up and from which date the person is resident in Switzerland under the treaty.

German pension taxation generally applies during the period of unlimited German tax liability. After treaty residence changes, the treaty allocation of taxing rights to Switzerland may apply.

The year of return should therefore be divided into the relevant periods using the actual pension payments and the specific change of residence.

Deregistration alone is not decisive

The end of unlimited German tax liability depends on whether a German residence or habitual abode has actually ceased. Simply deregistering with the local registration authority is not necessarily sufficient.

Special rules for Switzerland

The Germany–Switzerland treaty contains special rules for people leaving Germany

The treaty with Switzerland contains additional provisions that go beyond the usual residence and income articles.

In particular, Article 4(3) and Article 4(4) may be relevant to certain individuals who leave Germany and move to Switzerland. Under specified conditions, these provisions may allow Germany to retain taxing rights or exercise them for a transitional period.

  • German nationality may be relevant
  • Review previous German residence
  • Identify continuing economic ties to Germany
  • Consider the five-year rule in relevant cases
  • Assess pensions as part of the overall move

There is no universal rule that Switzerland alone always taxes the pension

For a typical pensioner returning permanently to Switzerland, a German statutory pension is generally allocated to Switzerland for tax purposes. Where German ties continue after departure, the treaty’s special provisions must also be reviewed.

Pension payments

Deutsche Rentenversicherung generally also pays pensions to recipients in Switzerland

Permanent residence in Switzerland generally does not result in the loss of an already acquired German statutory retirement pension.

Germany and Switzerland participate in European social security coordination. Insurance periods from both countries can therefore be coordinated when assessing eligibility requirements, without merging the pension systems themselves.

A German pension can generally be paid into an account in Germany or abroad. The payment arrangements and tax residence must be considered separately.

DE

German insurance periods

Germany calculates the German pension using German insurance periods and rules.

CH

Swiss insurance periods

Swiss AHV insurance periods generally give rise to a separate Swiss pension entitlement.

EU

Coordination

Insurance periods from both countries may be taken into account when assessing eligibility.

Pensions and health insurance

Review tax and health insurance separately

Moving to Switzerland while receiving a German pension affects more than income tax. It is also necessary to establish which health insurance system covers the pensioner and which country is responsible for healthcare benefits and contributions, where applicable.

This allocation under social security law does not automatically follow the allocation of taxing rights over the pension.

Health insurance coverage should be reviewed separately, particularly where a person receives both a German pension and Swiss AHV or other pensions.

Section 1(3) EStG

Applying for treatment as an unlimited taxpayer is not automatically beneficial

Under certain conditions, individuals without a German residence may apply under section 1(3) EStG to be treated as subject to unlimited German income tax liability.

In particular, at least 90% of their income must be subject to German income tax, or the income not subject to German tax must not exceed a specified threshold.

Where a German statutory pension is allocated exclusively to Switzerland for tax purposes under the treaty, this provision may operate differently from cases involving income that Germany is actually entitled to tax. The application should therefore not be made automatically.

Other German income may change the outcome

If, in addition to the statutory pension, there is income from German rental property, permanent establishments, private disposals or other German sources, the overall German filing position must be reassessed.

Documents

Which documents should be available when returning to Switzerland?

Document Why it matters
Pension award notice from Deutsche Rentenversicherung Establish the type and amount of the German statutory pension
Annual pension statement Provide the gross annual amount for Swiss tax reporting
Evidence of the pension commencement date Support the German tax treatment in the year of return and the historical classification
German deregistration and housing documents Document the end of German residence
Swiss registration and rental or purchase agreement Prove when Swiss residence began
Documents relating to other German pensions Distinguish statutory, occupational and public-service pensions
Swiss AHV and occupational pension documents Capture all retirement benefits for the Swiss tax return
Evidence of other German income Review continuing German tax liability

Approach

Review a return to Switzerland with a German pension in eight steps

01

Residence

Establish when German residence ends.

02

Treaty residence

Determine residence under the Germany–Switzerland treaty.

03

Pension type

Distinguish statutory, occupational and public-service pensions.

04

Tax treaty

Identify the correct treaty article for each pension type.

05

Special rules

Review Article 4(3) and (4) when leaving Germany.

06

Germany

Identify any remaining German filing obligations.

07

Switzerland

Report the German pension in the Swiss tax return.

08

Insurance

Coordinate health insurance separately.

Frequently asked questions

German pensions after returning to Switzerland

Can I continue receiving my German statutory pension if I move to Switzerland?
Yes. A German statutory retirement pension can generally continue to be paid when the recipient lives permanently in Switzerland.
Where is my German statutory pension taxed after the move?
If you are resident in Switzerland under the treaty, taxing rights over an ordinary German statutory social security pension generally belong to Switzerland.
Why does Germany not tax the pension even though it comes from Germany?
Under German domestic law, the pension generally constitutes German-source income. However, the Germany–Switzerland treaty limits Germany’s taxing rights and generally assigns a statutory social security pension to Switzerland for tax purposes where the recipient is resident there.
Do pensions from Deutsche Rentenversicherung fall under Article 18?
Under the recognised interpretation of the Germany–Switzerland treaty, German statutory pension insurance benefits are generally not treated as pensions within the meaning of Articles 18 and 19. They are generally allocated under the residual provision in Article 21.
Is my German pension fully taxable in Switzerland?
German statutory social security pensions are generally treated in Switzerland in the same way as comparable Swiss social security benefits and are generally included in full in the tax base.
Does my German pension tax-free allowance also apply in Switzerland?
No. The German pension tax-free allowance is part of German income tax law. Switzerland determines the taxable pension amount under its own rules.
What applies in the year of the move?
In the year of return, it is necessary to determine when unlimited German tax liability ends and when Swiss treaty residence begins. Pension payments may therefore fall under different tax rules during different parts of the year.
Do I still need to file a German tax return after moving?
This depends on the overall circumstances. A German statutory pension for which the treaty removes Germany’s taxing rights does not, on its own, necessarily create an ongoing German tax liability. Other German income or special treaty provisions may nevertheless mean that a return is still required.
Does the same treatment apply to a German occupational pension?
Not necessarily. Private-sector occupational pensions may fall under Article 18. The specific pension arrangement and the legal origin of the payment must be reviewed.
Does the same treatment apply to a civil-service pension?
No. Public-service pensions may fall under Article 19 and therefore be subject to different tax rules from a statutory pension paid by Deutsche Rentenversicherung.
Can the treaty’s special rules for people leaving Germany be relevant?
Yes. Article 4 of the Germany–Switzerland treaty contains special provisions for certain individuals after leaving Germany. A return to Switzerland involving substantial continuing German ties should therefore be reviewed individually.
Are German and Swiss pension insurance periods added together?
Insurance periods may be taken into account when assessing eligibility under European social security coordination. However, Germany and Switzerland generally calculate and pay their respective pensions separately.

Further tax knowledge

Related Germany–Switzerland topics

When German tax liability ends

Domestic residence, treaty residence and continuing German tax liability.

Tax returns in the year of departure (German)

German tax liability, exemption with progression and the treaty in the year of the move.

Swiss AHV for German residents (German)

The reverse situation: a Swiss social security pension received in Germany.

Pension taxation in Germany

The taxable percentage, pension tax-free allowance and German pension taxation.

Germany–Switzerland tax advice

Are you returning to Switzerland while receiving a German pension?

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