Degiro Broker & Taxes help!

Hello Mustachians,

Me and my girlfriend started invest via Degiro in January 2020 but we still have some questions.

Question 1#: We are investing in our 2 accounts, each month with Degiro (Basic Account) in the ETF VWRL EUR. Are the dividends already taxed (net)? or do we need to declare it at the end of the year?if yes, how much is the % tax?

Question 2#: We invest 4000.- chf each month (2000.- in each account) Do this amount Degiro still a safe Broker for long term investment? What happen if Degiro goes Bankrupt? our assets (ETF VWRL) can be transferred to another Broker, right?

Thank you;)

They deduct only source country’s withholding tax but generally nothing towards your swiss taxes. You have to sort out the swiss tax side yourself.

it depends. Your canton? Municipality? Marital status and dependants? Yearly income? Dividend and any other non-taxed-at-soruce income? Assets?

I’d like a crystal ball too

Theoretically they are required to segregate customer assets from brokerage’s own assets so that their creditors wouldn’t be able to reach into your assets, but that’s in theory. In practice, they could comingle assets with their own, complicating bankruptcy case. Or straight up embezzle them into offshores. Somebody’s eventually should be going to jail in the latter case but it would not necessarily make you whole if courts and police would be unable to recover your assets in the end.

Non-custody accounts have further complications due to security lending.

If your assets haven’t gone AWOL, are where they are theoretically supposed to be, if they were lent - the lenter returned them, etc. then yes.

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Consider making the switch to Interactive Brokers, also below 100k. Even if you can buy the ETF for free on Degiro, they are charging 2€ + 3% of each dividend payout. Plus there is the 0.1% FX fee.

So in your case it’s 24 CHF / year on FX fees. Dividends are 8 CHF with 4 payouts per year, so we are at 32 CHF / year already. IBKR costs 120 CHF / year if you are below 100k. So the gap is 88 CHF. With 2.1% dividends and 3% charge on dividends that’s 0.063% lost on profits. The TER is also 0.13% higher than VTs, so you are losing 0.193%/year.

88 CHF / 0.193% = 45’600 CHF.

With your savings rate (assuming 0 net worth in January 2020) Degiro will start getting more expensive than IBKR in November 2021. If you account for lost US tax (which you could get with the DA-1 form), IBKR will be cheaper even sooner than that (from 28k, so by March 2021 in your case).

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Thanks for your answer, now i understand better.

We have Degiro Standard(Basic) accounts, so we aren’t charged on dividends.Regarding IB, i downloaded de platform and tried playing in the demo account, and honestly it seems so complicated and not user-friendly when compared with Degiro platform.

Thank you

I was thinking the same, but Client Portal and the app are great.

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Yes, client portal is pretty good. A bit buggy but I can’t complain about UX

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