You are allowed to deduct the payments into pillar 3a from your taxable income and therefore reduce your tax burden. Employees and self-employed persons who are affiliated to a pension fund may pay in and deduct up to CHF 7,056 (2023). Self-employed persons who are not affiliated to a pension fund can pay in and deduct up to 20 percent of their net income subject to AHV / OASI contributions, up to a maximum of CHF 35,280 (2023). For every 1,000 francs paid in, you can save between 150 and 400 francs of tax, depending on your income and place of residence.
The credit balance (assets) and any interest income are not taxed until they are paid out. However, the credit balance is then taxed separately from income when it is paid out. This capital benefit tax is progressive. That is why you should have several 3a solutions and liquidate them in different years in order to optimize your tax burden. A capital withdrawal is possible five years before reaching the AHV / OASI retirement age. Each 3a solution must be liquidated completely.