Claiming credit on US listed swiss companies

Taxes
1

Let’s say I own Novartis listed on NYSE (via an US broker): https://www.google.com/finance/quote/NVS:NYSE

Dividend: $100
Foreign Tax Paid: $35 (was this paid to US or to Switzerland)?
What should I list as my income from this stock: $100 or $65?

Can I claim 15% from swiss folks back, in my DA-1?

2

Welcome portoriko!

For US stocks the rules are this:

You can claim back 15% via DA-1 if you claim back more than 100 CHF in total for the year.
If you don’t file W8-BEN, you pay 30% (to the US) but can only get 15% via DA-1 (this would be the same with a Swiss broker).

If you have a US broker then filing W8-BEN will reduce the 30% to 15% (to the US), because there is no additional Swiss withholding tax. Then DA-1 gets you everything back.

(If you had a Swiss broker and filed W8-BEN, then on the dividend statement the 30% is split into 15% (to the US) + 15% (to Switzerland) and then you can also claim back this additional 15% via RUS.)

I think you need to declare $100 as income if you claim back the taxes.

It is only possible to declare $70 (not $65?) as income if you do not claim back the withholding tax (or cannot because the amounts are too low) and the $30 are completely lost.

But in your case, it is a Swiss stock and since you got 35% taken away, it looks more like the Swiss withholding tax. Then you could get it back fully by putting the dividend in the right column (the one with Swiss withholding tax) in your declaration.

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3

I am not sure if those $35 went to US tax authorities or to Switzerland tax authorities. If it was tax withheld by US IRS it wouldn’t say “Foreign tax paid”, it would probably say “nonresident tax adjustment”, and it would be exactly 30% (but I am a noob).

4

$35 would match the 35% Swiss Verrechnungssteuer. And this makes sense given that the company’s domicile is in Switzerland. I would guess that you can declare it the same as if you had bought it at SIX and you’ll get the full 35% back. However, I don’t have any experience with buying Swiss companies at US stock exchanges, so I’m not sure.

I assume they are Novartis AG SADR shares with the ISIN US66987V1098. Check that ISIN on ICTax - Income & Capital Taxes and you’ll se it listed with Swiss Verrechnungssteuer. This would confirm my first paragraph.

5

ADR stocks apply the tax at source of the originating country, Switzerland in your case.

6

Which is not reclaimable, I suppose?

7

The Swiss withholding tax was witheld and is fully recoverable if declared in the tax return

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