LPP buyout, capital withdrawal and tax evasion

The taxpayer is made redundant in the context of collective dismissals. Six weeks before the end of the employment relationship, she informs her employer that she will be taking early retirement six months after the end of the employment relationship. The employment relationship ends. The taxpayer finds new employment one month later. The employer grants her a capital sum to be paid into her pension fund. The employer states that this capital can only be paid out in the form of an annuity. The taxpayer makes two capital withdrawals from the occupational pension schemes, in line with what had been announced more than six months previously. The taxpayer declares the capital sum as a tax-deductible occupational pension withdrawal.

The tax authorities are refusing the buy-back on the grounds that the three-year lock-in period has been violated.

Federal judges recall that the three-year blocking period is an objective standard and applies to all forms of withdrawal from the second pillar: there is no scope for discretion for an individual assessment. Nor is there any room for a factual analysis based on tax evasion. Therefore, there is no analysis of direct connection between a repurchase and a capital withdrawal: was the repurchase under review subject to a specific capital withdrawal.

The judgment is in German. This is a Basel-Landschaft (BL) case.

TF, Judgment 9C_578/2025, of 26 February 2026