Swiss 3rd pillar for US citizens

[gaijin]

So far it has been my understanding that a US-American citizen living in Switzerland should not have a 3rd pillar since these assets are taxed in the US.
However, I have recently heard about a way to not get taxed. Assuming you are married and both are US citizens, you can pay into an IRA account. If your payments into the IRA accounts match the amount of your 3rd pillar account, your 3rd pillar is not taxed by the US.
Can anyone confirm or deny such hearsay?

 

[Baptiste Wicht]

I would also be interested in knowing this.

I know a few US citizens in Switzerland, and I have never heard of anyone using an IRA from Switzerland.

Even if these assets are taxed in the US, won't you still get the tax savings in Switzerland?

 

[leochance]

So far it has been my understanding that a US-American citizen living in Switzerland should not have a 3rd pillar since these assets are taxed in the US.
However, I have recently heard about a way to not get taxed. Assuming you are married and both are US citizens, you can pay into an IRA account. If your payments into the IRA accounts match the amount of your 3rd pillar account, your 3rd pillar is not taxed by the US.
Can anyone confirm or deny such hearsay? Drift Hunters

I’d be cautious with that claim. The US tax treatment of Swiss 3rd-pillar assets can be quite complex, and simply matching the contribution with IRA contributions doesn’t necessarily make the 3rd pillar tax-free. I’d want to see an IRS-specific source or guidance before relying on that strategy.

 

[gaijin]

The US tax treatment of Swiss 3rd-pillar assets can be quite complex, and simply matching the contribution with IRA contributions doesn’t necessarily make the 3rd pillar tax-free.

Fully agree. That's why I'm asking for more information from the forum

 

[alexiaamber]

So far it has been my understanding that a US-American citizen living in Switzerland should not have a 3rd pillar since these assets are taxed in the US.
However, I have recently heard about a way to not get taxed. Assuming you are married and both are US citizens, you can pay into an IRA account. If your payments into the IRA accounts match the amount of your 3rd pillar account, your 3rd pillar is not taxed by the US.
Can anyone confirm or deny such hearsay? hot games

I’m not sure that the IRA contribution matching the 3a contribution creates a general exemption. My understanding is that U.S. citizens remain subject to U.S. tax on worldwide income, and treaty provisions have to be checked carefully because of the treaty’s saving-clause rules.

There is a U.S.–Swiss competent-authority arrangement covering certain Swiss and U.S. retirement arrangements, so I wouldn’t dismiss the possibility that the rumor is based on a real provision. But I’d want to see the specific treaty article or IRS guidance supporting the “matching IRA contribution” mechanism before relying on it.

If anyone has the actual source for this strategy, I’d be interested in seeing it. This seems like one of those areas where the exact type of 3a, IRA, contribution, and tax treatment matters a lot.