Taxes on life annuities in Switzerland

What taxes apply to life annuities in Switzerland? Do you have to pay tax on annuities?

Hi there,

In Switzerland, 40% of income recieved through life annuities must be counted towards your taxable income.

Example: You receive a life annuity of 15,000 francs per year. 6000 francs of that annuity must be counted as taxable income. So you pay income tax on 6000 francs, but not on the remaining 9000 francs.

It is important to note, however, that Swiss life annuities generally do not fall under the 2a or 3a retirement saving categories. That means you will normally finance your annuity with taxed money. So part of the money is taxed twice: once as regular income before being used to buy the annuity, and once when you receive the annuity.

While getting a life annuity can make sense in specific circumstances, saving with 3a retirement savings accounts, making voluntary contributions to 2a pension funds (when possible) or getting 3a mixed life insurance lets you avoid double taxation because 2a and 3a contributions are tax deductible.

Best regards from Moneyguru

More on this topic:
3a account comparison
Swiss life annuities explained
Whole life insurance explained

The way in which life annuities are taxed in Switzerland changed in 2025. Today, taxes on the guaranteed portion of a life annuity is based on the maximum technical interest rate for life insurance published by Swiss financial supervisory authority Finma. For possible insurance dividends on top of the guaranteed portion, 70 percent of the amount received counts towards taxable income.

In most cases, this new arrangement results in lower taxes on life annuities.