The Cantonal Government proposes capping the tax burden on pension capital withdrawals from 2024. The resulting overall maximum tax rate in Ticino will be approx. 8% (combined federal, cantonal, and communal).
Currently, a pension capital withdrawal of CHF 500,000 is taxed at an overall rate of approx. 7%. In this scenario, Ticino’s overall tax rate is the 10th highest among the 26 Swiss cantons. However, for pension capital withdrawals starting at CHF 800,000 (tax rate of approx. 12%), Ticino drops to the 26th rank, becoming the most fiscally expensive Swiss canton. The tax rate further increases as the withdrawal amount rises: approx. 19% for a pension capital withdrawal of CHF 2 million and approx. 24% for a withdrawal of CHF 5 million.
By comparison, the neighbor cantons, the Canton of Graubünden and the Canton of Uri, apply a maximum rate of around 6%. The significant tax burden difference between Ticino and the other Swiss cantons has led many taxpayers to leave Ticino and relocate to other cantons.
If the proposed tax measure comes into effect, with a maximum tax rate of approx. 8%, the Canton of Ticino will become competitive not only – as is currently the case – for pension capital withdrawals of a few hundred thousand Swiss francs, but also for much higher amounts.
The proposed tax measure aims to discourage individuals from leaving Ticino and transferring their residence to other Swiss cantons, while also attracting new taxpayers to Ticino.