Only Swiss Intermediaries impose an additional tax of 15% on US dividends received by Swiss beneficial owners and submit the amount to the Swiss tax authority. Therefore, there are “no other 15%” withholding tax which you could claim with the DA-1.
With IB as a foreign broker, you can ask the refund with DA-1
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DA-1 allows you to reclaim both “Zusätzlicher Steuerrückbehalt USA” (withheld by Swiss intermediaries, so not IBKR in this case) as well as apply for tax credit for withholding tax, if applicable:
“Dieses Formular dient einerseits als Antrag auf pauschale Steueranrechnung für die im Jahre 2018 fällig gewordenen Dividenden und Zinsen und anderseits als Antrag auf Rückerstattung des zusätzlichen Steuerrückbehaltes USA, der in der Schweiz vom Ertrag amerikanischer Aktien und Obligationen abgezogen worden ist.”
As I understand it, while indeed no “Zusätzlicher Steuerrückbehalt” will be withheld in Switzerland, the US is one of many countries from which withholding tax on dividends can be credited against domestic taxes.
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Yep, right.
Picking on the details here, but for clarity you won’t get “the other 15%”, but you get a credit thereof on your swiss taxes (due to double-taxation treaty CH-USA).
“This detail” helps to understand and differentiate with the “refund” given by CH of the “Zusätzlicher Steuerrückbehalt USA” withheld by Swiss brokers.
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I had 38 CHF and 0.09$ in my IBKR. Today I noticed that IBKR made a FX change on 2nd January witout fees, now I don’t have any USD anymore.
Why are they doing this? Is this automatically every month for balances below a certain amount?
Same here… Last entry:
FX Translation P&L -0.02
I don’t think it is a charge but a virtual position. I understand that against my main currency, I lost 0.02 USD with the last currency movements…
“IB will act to automatically convert non-Base Currency balances only where the balance is nominal (i.e., below USD 5 equivalent and assuming no subsequent trade activity through settlement)” (https://ibkr.info/node/2059)
This is a pretty customer friendly policy IMHO, considering that otherwise you’d have to spend at least $2 to convert.
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Pretty nice!
Do they do this every month?
“no subsequent trade activity through settlement” => within 2-3 business days of your original trade in most cases
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Trump just increased the limit to 11.58 million USD.
So if you have more than 60k in US Assets, the inheritors have to declare everything what you owned and send everything translated into English to the IRS. If they don’t do it, your US assets will be taxed up to 40%.
If you end up with more than 11.58 million USD in total assets (worldwide), your inheritors might have a problem and get taxed massively.
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First of all, thanks to all the helpful answers here.
Going back on margin trading with IB (in particular to what @hedgehog was sharing previously), I am also one of those who doesn’t necessarily want to borrow money but would like to be able to buy/sell swiftly without having to wait for settlement. I understand scenario A below well, but I’m curious about scenarios B and C, all scenarios under the assumption of using a margin account, if you could shed some light, thank you!
Scenario A
T: sell X for $M
T: buy Y for $M
T+3: everything settles (cash balance at exactly 0), no loans, no margin calls, no fees
Scenario B
T: sell X for $M
T: buy X for $M (scenario of day trading on the same stock, for simplification purposes)
T: sell X for $M (later in the day)
T+3: everything settles, similar to scenario A, am I correct?
Scenario C
T: sell X for $M
T: buy X for $M (later in the day)
T: sell X for $M (still later)
T: buy X for $M (say before market closing)
T+1: sell X for $M
T+1: buy Y for $M
T+3 and T+4: what happens exactly? Is everything from T settling on T+3, but we still have trades of T+1 pending, is this a case of margin loans?
Thanks!
Settlement is per transaction. Or per transaction for every transaction of a day. There are not “adding the transactions together”. It is like when you use you debit card at Denner on saturday. The date of value of the transaction is monday.
Got it, thank you for your reply.
Knowing this, is there any risk in scenarii A and B?
As for scenario C, I’m still unsure whether there would be any margin loan consequence? I do understand each transaction made on day T would settle on T+3; yet would trades on day T+1 lead to margin loans as a result, until settlement of trades on T+4?
Thanks again.
Quick questions:
- Do any of you use the mobile app to exchange currency and buy ETFs?
- Is it possible to register a new fund transfer with the mobile app? I was only able to find it in the web version
- What kind of E-Mail notification have you set up regarding monthly reports and dividend payments? I just checked my statements and was surprised that I have received dividends, as I have not received any notification of said dividend payments
- Are you sticking with CHF as your base currency?
- Is the preferred method still to transfer CHF to IBKR and then immediately convert it into USD to avoid paying negative interest rates on CHF before the money is deployed?
- Is said interest rate on idle cash positions applied daily or monthly?
Thanks!
When do neg. interests apply? Is there a limit?
Yes, just find CHF.USD and issue a SELL order.
Yes, but much in the same way - it also takes you to the Web interface from the mobile interface.
I don’t use that (and don’t care much).
No, I keep it in USD.
For me yes.
And for that I have no clue.
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Why? I don’t see a reason why I would use USD. The benefit of CHF is, that the tax stuff is already in chf.
As all my assets at IB are in USD (and commissions get charged in USD), I prefer not to see additional fluctuations due to changing forex rates.
Might be some other reasons too, I don’t remember anymore. 
And you can anyway change that whenever you want.
Tax report-wise it might make sense, but I think the tax tools (at least the one I tried) convert it properly.
I think it’s computed daily and applied monthly.
But it seems to me that the negative rate is only applied > 100k CHF balance.
Edit : nope it’s always there
Yeah and you can always see what your performance is based on CHF. I don’t care if VTI increased by 10% when at the same time USD lost 10% to CHF.
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