For Thai citizens who have lived and worked in Switzerland for a longer period of time, returning to Thailand is more than an ordinary move. In addition to the personal decision, Swiss social insurance, pension assets, taxes, banking relationships and, where applicable, family-law questions need to be clarified ahead of time.
A particularly important distinction must be made between persons who only hold Thai citizenship and persons who also hold Swiss citizenship. It also makes a difference whether someone returns while still of working age, is already retired, or is married to a Swiss citizen.
Deregistration in Switzerland and Return to Thailand
Anyone who leaves Switzerland permanently must deregister with their last municipality of residence. This confirmation of deregistration is an important document. It is often required for the payment of pension assets, for tax matters, for insurance purposes and by banks.
Of Course, Thai citizens do not need a visa to return to Thailand. Nevertheless, before returning, it should be clarified which address in Thailand will be used, especially in relation to Swiss authorities, banks, pension institutions and insurance companies.
Anyone who holds a Swiss residence permit should check before deregistration what consequences leaving Switzerland may have for a possible later return to Switzerland. Definitive deregistration will mean that existing residence rights in Switzerland are lost or will have to be applied for again at a later date.
AHV for Thai Citizens
Thailand and Switzerland have not concluded a social security agreement.
For persons who only hold Thai citizenship, this is important to be aware.
Anyone who only holds Thai citizenship and returns permanently to Thailand cannot export the Swiss AHV pension to Thailand in the same way as a Swiss citizen. Instead, there is the possibility of applying for a refund of the AHV contributions paid, provided the requirements are met. The Central Compensation Office (CCO) states that persons from countries without a social security agreement may be entitled to a refund; Thailand falls into this category.
The refund concerns the AHV contributions of the insured person and the employer’s side. The refund amount may amount to a maximum of 8.7% of the total gross income.
Important: Anyone who requests a refund will later not receive an AHV pension from Switzerland for these contribution periods. Therefore, the refund should not only be viewed as a short-term payout, but as a decision regarding future retirement provision.
The refund application form can be found here: Application form for refund
If the Thai Person Is Also Swiss
The situation is different for persons with Swiss citizenship, for example Thai-Swiss dual citizens. In that case, of course, the same rules apply to this person as to all Swiss citizens. A refund is then not possible.
If the Thai Person Is Married to a Swiss Citizen
Marriage to a Swiss citizen does not automatically change the person’s own AHV nationality rule. For the person’s own AHV entitlement, it remains crucial which citizenship the insured person personally holds.
Nevertheless, the marriage is important for overall planning. It should be checked how the pension provision of the Swiss spouse is regulated, which benefits exist in the event of death, which beneficiaries are provided for in the pension fund and pillar 3a, and whether a marriage contract, will or estate planning should be adjusted.
If the Swiss spouse also moves to Thailand, the rules for Swiss citizens abroad apply to that person.
Returnees of Working Age
Anyone who returns to Thailand before retirement age should first clarify which Swiss entitlements can be claimed before deregistration.
For persons with only Thai citizenship, the AHV refund is usually the main point. The application can already be submitted to the competent compensation office before departure.
In addition, the pension fund should be contacted early. Anyone who leaves Switzerland permanently and moves to Thailand leaves the EU/EFTA area. Hence, the pension fund assets can generally be withdrawn in full as a cash payment. Anyone who does not want to withdraw the money immediately can have it transferred to a vested benefits account or a vested benefits policy.
Pillar 3a assets can also be withdrawn in the event of definitive departure from Switzerland. In practice, the requirement is deregistration from Switzerland and proof of the new residence abroad. For pension funds, vested benefits and pillar 3a, it should be checked before withdrawal which withholding tax is due in Switzerland and whether a tax burden arises in Thailand.
If you cannot find a form or information on deregistration abroad on the website of the relevant provider, it is best to contact the pension fund and the pillar 3a provider directly and ask for the relevant information. This is because each company regulates this itself and there are no general forms or one central contact point.
Retired Returnees
Anyone who is already retired and only holds Thai citizenship should carefully check whether an AHV pension will continue to be paid to Thailand or whether a refund or another solution should be considered instead. Since Thailand does not have a social security agreement with Switzerland, the AHV situation for Thai citizens is different from that of Swiss citizens.
Pension fund pensions must be distinguished from AHV. A pension fund pension may, depending on the pension institution, also be paid abroad. Before leaving Switzerland, the address, bank details, tax forms and any life certificates should be clarified directly with the pension fund.
Anyone who receives supplementary benefits, helplessness allowances or other benefits linked to residence should check before returning whether these benefits cease when residing in Thailand. Supplementary benefits are tied to residence in Switzerland and are not paid out if the person resides in Thailand.
Health Insurance
With definitive deregistration from Switzerland, compulsory Swiss health insurance ends. Anyone returning to Thailand must reorganize medical coverage in Thailand.
For Thai citizens, depending on their life situation, coverage through the Thai healthcare system, private Thai insurance or international health insurance may be considered.
Taxes and Withholding Tax
With the move to Thailand, unlimited tax liability in Switzerland ends if the center of life is actually transferred to Thailand. The center of life must effectively be in Thailand. This means that if someone continues to spend a lot of time in Switzerland, a tax office may possibly question this.
Even after leaving Switzerland, Swiss tax may still arise, especially in relation to real estate in Switzerland, pension withdrawals, pensions or other income from Swiss sources.
Withholding tax on pension benefits is particularly important. If pension fund assets, vested benefits or pillar 3a assets are paid out after leaving Switzerland, Switzerland generally levies withholding tax. The amount is not determined by Thai law, but by the canton in which the pension or vested benefits institution has its registered office. The extent to which such income is taxed twice in Thailand must be examined individually.
For Thailand, a precise distinction should be made in relation to pension benefits. According to the Federal Tax Administration (FTA) overview, ongoing pensions from private-law pension funds are not subject to Swiss withholding tax. In the case of lump-sum benefits from the second pillar, withholding tax is initially deducted, but according to the FTA overview it can be reclaimed for Thailand.
For lump-sum benefits from the pension fund or from vested benefits assets, Switzerland levies withholding tax if the person resides abroad. The tax is levied in the canton where the pension or vested benefits institution has its registered office. Pensions may also be subject to Swiss withholding tax, insofar as the applicable double taxation agreement does not assign the right of taxation to the state of residence.
According to the FTA overview, pensions from pillar 3a are subject to Swiss withholding tax; for lump-sum benefits from pillar 3a, no refund is provided for Thailand. Before making a withdrawal, it should therefore be checked from which pension institution the benefit comes and whether it is a pension or a lump-sum payment. For Thailand, the tax treatment must be examined individually.
There is a double taxation agreement between Switzerland and Thailand. However, the double taxation agreement is not a general solution for all tax matters. It applies only to specific types of income and concrete cases. Therefore, in each individual case it should be examined whether Swiss withholding tax remains definitively due, whether a refund is possible and how Thailand treats the withdrawal or later pensions for tax purposes.
Swiss Bank Account and Financial Services
Before returning, it should be clarified whether existing Swiss bank accounts, credit cards, securities deposits, e-banking access and pension accounts can continue to be maintained. If the place of residence is Thailand, banks may restrict services, charge additional fees, no longer offer certain products or terminate the banking relationship.
For persons with only Thai citizenship, maintaining a Swiss bank account may be difficult. It is therefore all the more important to clarify with the bank before deregistration whether the relationship will continue, which fees apply and whether larger transfers to Thailand must be documented.
Family, Marriage and Assets in Thailand
Anyone returning to Thailand should also examine the family-law and property-law consequences. This applies in particular to marriage, joint assets, real estate, bank accounts, children, maintenance, beneficiaries in pension institutions and estate planning.
Special caution is required in binational marriages between a Thai and a Swiss person. Swiss and Thai law differ significantly in relation to matrimonial property, inheritance law, real estate and estate planning. Anyone who has assets in both countries should avoid Swiss and Thai regulations standing next to each other in an uncoordinated way.
Further information on marriage, assets, real estate and estate planning in Thailand can be found in separate articles on the NomadLaw blog.
Conclusion
For Thai citizens returning from Switzerland to Thailand, the correct classification is decisive. Anyone who only holds Thai citizenship must plan AHV differently from a person with Swiss citizenship. Anyone who is married should additionally coordinate the pension and estate planning of both spouses.
Employed persons should clarify, in particular, the AHV refund, pension fund, pillar 3a, taxes and banking relationships before deregistration. Retired persons should carefully check which pensions are paid abroad, which benefits cease and how health insurance, taxes and bank connections are organized.
This article is for general information only and does not replace individual legal, tax or financial advice.
