In this article, René Matteotti and Alexandra Münger examine the classification of Swiss old-age and survivors’ insurance (AHV) pensions under tax treaties, in light of recent decisions of the Austrian Supreme Administrative Court of October 7^th, 2025. The court classified AHV pensions as government service pensions within the meaning of Article 19 of the tax treaty between Austria and Switzerland, thereby allocating taxing rights to Switzerland as the paying state and accepting the resulting double non-taxation.

From a Swiss perspective, AHV pensions lack a sufficient nexus to specific employment relationships and are instead based on a compulsory social security system with pronounced redistributive elements. In line with established Swiss practice and doctrine, such payments are therefore classified as “other income” under Article 21 OECD Model Convention.

The resulting divergence in treaty qualification exposes a structural inconsistency between treaty law and domestic tax law leading to double non-taxation. As the Austrian Supreme Administrative Court disregarded the mutual agreement between Switzerland and Austria, under which AHV pensions were classified as “other income”, on ...