DayTrading abroad and Swiss Taxes

Taxes
1

Hi all!

Last year I was heavy day trading with x20 leverage on XTB in Poland. I was living in Switzerland and was working there.

Questions:

  • do I need to declare those incomes in Switzerland? ( I’ve declared those incomes in Poland and paid the 19% taxes )
  • will I by declared tax eligible because of the speculative nature of this investments?
  • I’ve forgotten to inform the broker that I’ve changed my Tax Residency last year (did it this year). The broker is not able to make those changes for the past. Should I inform the Swiss Tax Authorities or is this ok?
  • and an obvious question: which tax advisor would You recommend for such cases? :slight_smile:
2

Yes you need to declare foreign income (and foreign wealth).

(I don’t think swiss tax folks will care about whether the broker knows about your tax residency as long as you declare it)

Note sure a tax advisor will help much tbh.

3

@nabalzbhf

thanks! do you think I have to declare this as income (which I have paid already taxes for) or is foreign wealth ok?

technically I’ve started last year to be a swiss tax resident (moved in february 2022) and made the gains as the same time (BUT in a foreign country). so not sure how this is handled…

4

Why wouldn’t you need to declare it? If you were swiss resident at that time, that’s where you’re taxed.

5

@nabalzbhf

I want to declare it as ‘income from investing’ but I’m afraid that I will be classified as a professional investor (the volume of transactions is enormous, it’s day trading, highly leveraged).

the income was already taxed in the foreign country. now it would be taxed a second time in Switzerland?

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6

Whether the day trading activity counts as income I don’t know. But the swiss tax folks won’t care that you already paid taxes…

7

I would only declare to the Swiss authorities what you had at the beginning of the year and at the end of the year and show one resulting transaction to balance it. Swiss authorities do not assume regular persons to be professional traders and thus capital gains remain untaxed.

Should Swiss tax authorities take a different view, then you could possibly argue based on double tax treaty PL - CH that you already payed income tax in PL and that it should be reclaimable. Switzerland still has the stance that it is not illegal to “forget” part of your tax declaration (tax evasion as opposed to tax fraud).

(PS: as pointed out by @San_Francisco and @jay further down, this approach is not helpful and should be disregarded.)

8

Should be totally OK, as long as you properly declare your income to the Swiss tax authority.

You also have to inform your broker about change of residence - but that’s between you and your broker.

Basically lying and/or making a transaction up, you mean?
That’s at least straddling the line between “forgetfulness” and fraud.

It’s certainly isn’t merely “forgetting” things, as you suggested.

As a side note, (total) proceeds from sales of financial assets are to be reported for reportable accounts under the Common Reporting Standard. My (EU) broker did report it to the Swiss tax administration - though in Rafal’s case they did make it quite clear they won’t (retroactively).

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9

Declaring a fake transaction doesn’t make sense to me (and might technically be considered tax fraud).

I would add a single summary line to the ‘Wertschriftenverzeichnis’ for everything on XTB, declaring the total dividend income and the total value at the end of the year. And attach a broker statement (covering the time period of Swiss tax residency). A broker statement with just a summary without individual trades may or may not get accepted. Depending on various factors, there is a risk of getting classified as professional trader but it’s definitely also possible that they accept you as private trader for 2022.

No, assuming Rafal was a Swiss tax resident at the time, the country of the broker is irrelevant. You can’t simply pay taxes to a foreign country and then expect to be exempt from Swiss taxes. He may be able to reclaim taxes from Poland as he likely paid taxes without owing any but that’s between the Polish tax authorities and him. I don’t expect the Swiss tax authorities to help in this regard (except possibly providing a confirmation that he became a Swiss tax resident at a certain date).

10

To clarify this point, the domicile of the broker or the securities typically doesn’t matter at all, if you’re a Swiss tax resident. Lots of people here use foreign brokers and invest in foreign securities. You may be able to get a Swiss tax credit for withholding taxes on foreign dividend income (as per the relevant double taxation agreement). However, I don’t think there is any situation where you can get a tax credit for capital gains taxes on securities.

I’m not quite sure what you mean with ‘the same time’. Do you simply mean the same year? Or did you make the trades before you made the move and thus, before you became a Swiss tax resident? You only have to declare trades that happened after the move.

See the post above for my recommendation. I would definitely check with the Polish tax authorities whether you can still get your taxes back.

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11

There is - or should be - a switch date upon which tax residency changed from Poland to Switzerland. I assume that an applicable double taxation agreement should also prevent double taxation (though there may be an exit tax of sorts in Poland) for capital gains.

That said, I‘d expect it hard to impossible to get back taxes from a tax authority after the fact, that is after you accepted and paid their tax bill without challenge.

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