Occupational pensions and free movement of persons – anticipated Federal Supreme Court ruling

👉 The insured person, a 🇫🇷 national, arrives in 🇨🇭 and makes contributions to cover pension gaps. The pension fund informs the insured person that it cannot accept more than 20% of the insured salary as a top-up payment during the five years following arrival in 🇨🇭 (Art. 60b para. 1 OPP2).

Federal judges rule:
The ALCP prohibits discrimination based on nationality
The Cotonou Agreement grants the same fiscal and social benefits as those available to nationals.
▶️ The ALCP does not prevent a measure intended to ensure the assessment, payment, and effective recovery of taxes or to prevent tax evasion
Regulation (EC) No 883/2004 on the coordination of social security systems is not applicable (yes, Switzerland applies EU law)
The directive 98/49 EC is applicable (which is EU law)

Federal judges recall that «the principle of non-discrimination derived from the free movement of persons prohibits not only overt discrimination based on nationality (direct discrimination), but also all disguised forms of discrimination which, by applying other criteria of distinction, lead in fact to the same result (indirect discrimination). In the area of direct taxation, which falls within their jurisdiction, States must therefore refrain from any overt or disguised discrimination based on nationality» (para. 6.2.1).

The OPP 2 creates differential treatment, without distinction of nationality, but de facto mainly to EU nationals arriving in Switzerland and therefore constitutes prohibited indirect discrimination.

ALCP allows for the justification of unequal treatment based on legislation aimed at ensuring the «coherence of the system» regarding taxation, payment, and the effective collection of taxes, or to prevent tax evasion.

Art. 60b para. 1 OPP 2 is one of the fiscal instruments reserved by the ALCP as it aims to combat abusive tax optimisation. Indeed, it is not inconceivable that the institution of the second pillar might be used as a «fiscally advantageous current account» in a constellation such as that of the case in question.

Does the ALCP impose respect for the principle of proportionality, and if OPP 2 also respects it, can they remain undecided?.

«The coherence of the tax system may be invoked to justify a prohibited difference in treatment»; «for an argument based on such a justification to be admissible, the existence of a direct link between the tax advantage concerned and the offsetting of this advantage by a specific tax levy must be established».

The five-year period of the OPP 2 is admissible, as is the ceiling, in order to maintain the balance of the tax system between permitted deductions and a taxpayer's taxation.

The ruling is in French; it concerns a Genevan case.

Federal Tribunal, judgment 9C_430/2023, of 7 July 2025