Investing abroad vs Swiss taxes


I was thinking about putting small % of my capital to create a more aggressive portfolio, meaning that I may buy/sell certainly a lot more frequent than at least 6 months.

My plan was to open a new account at some Polish broker and play there. How should I proceed with that, not to be qualified as a professional investor in Switzerland? I guess when while opening the account I enter that I’m Swiss tax resident, Swiss authorities will get all the information automatically?

Another thing is that in Poland there is capital gain’s tax (19%) - if I pay it in Poland, would that be taken into account while taxes calculation in Switzerland?

You can only be sure that you will not be categorized as a professional investor in Switzerland if you meet all of these criteria:

  1. You hold securities for at least 6 months before you sell them. - Triggered

  2. The transaction volume of all of your securities trades combined (total spent on purchases and total earned on sales) is not higher than 5 times the total value of your securities at the start of a tax year. - Unknown if triggered

  3. Capital gains generated through securities trading do not account for a significant portion of your basic income. The rule of thumb: Capital gains should account for less than 50 percent of your net income. - I assume this will not trigger.

  4. You use your own assets to finance the purchase of securities. Or: Taxable returns like interest and dividends are higher than interest owed on loans. - I assume you don’t leverage

  5. If you invest using derivatives – and options in particular – these can only be used to hedge your own securities. - I assume you don’t trade options

So you’ll still be at least 3/5 of a non-professional trader. Which I guess will mean that you will not be taxed for capital gains.

Not sure about Polish taxation here but usually brokers ask for residency and apply that tax treatments.

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Many thanks! That’s reassuring :). However, another thing came to my mind - as I won’t be able to obtain tax document for Swiss authorities from Polish broker, does it mean that I would need to put all transactions manually into my tax declaration? That would be a nightmare in case of big number of transactions…

I assume your broker will give you some form of transaction statement. As far as I understand for positions that have been closed before 31st of December w/o significant gains (see profits don’t exceed 50% of net income) it’s not mandatory to detail each transaction, but better call the tax office to get clarification on that one.

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What makes you think you don’t have to declare every transaction ?

Because not every cantonal tax form/tax software asks for this. In BE they are interested in how many assets you hold at the end of year and dividends received on those assets.

I see. Vaudtax wants to know… everything.

Exactly - maybe they have a goal to force people investing long-term :D.

You can fill everything but when you check what is sent to them eventually, it is summarized in how much dividends and how many stocks.

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I thought that when they scan it, they have everything, and not only what is “printed”.

Iirc for my TrueWealth portfolio which I had for two years the year end statements and the payed dividends during the year were the only things asked. I don’t recall any transaction details on that tax statement provided by them. But yeah depending on canton YMMV

Yeah I’m not sure if they actually have access to it. I just assumed that they get what is printed. Anyway, you should be ready to provide it if they ask.

Based on the guidelines, the logical consequence of “You won’t be classified as professional investor if you meet all criteria” is “you can be classified as professional investor if you don’t meet one or more”.
Tax authorities can classify you as professional investor if you hold securities for less than 6 months. If you start doing high frequency trading, even without triggering all the other criteria, I wouldn’t be confident of not getting classified as professional investor.

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That’s true, if you want to be sure, don’t violate any criteria. But the leverage is the one I would be more careful about…

While I don’t know about Poland, it’s highly unlikely that a non-Polish (tax) resident would have to pay capital gain tax. Or any EU country that he/she isn’t a tax resident of (though withholding taxes on distributions might very well be withheld).

You are probably right, I’m doing something, which is probably wrong from tax optimization point of view. As I’m renting an apartment in Poland, I’m sending my tax declaration in Poland too - to be honest, currently I’m not sure why exactly :D, but I think that after some research I found that it has to be done. Because I do that, I have also to declare my income in Switzerland, but I don’t pay taxes in Poland on this - it is just used to calculate the tax rate for the income from renting the apartment. This is why I thought that once I have some gains from stock market, I would have to declare it in Poland too.

Then, I have to declare the income from renting the apartment in Switzerland too, which means that I’m probably taxed twice…

I assume you are renting out that apartment in Poland (that you own?)? That’s why you have an income in Poland, right?
Property income is usually taxed at the location of the property. But if you’re not a tax resident, only the property income, nothing else.
Do you also rent out an apartment in Switzerland, since you have an “income from renting the apartment in Switzerland too”.
#confused :thinking: :slight_smile:

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Sorry, I was not clear enough. I’m renting out the apartment in Poland (which I own), I pay taxes on this income in Poland, but then I have to declare the same apartment also in Swiss tax declaration, where I put also the same income, so I’m probably taxed twice in this case.

Unless there’s a weird dual taxation treaty (or you’re filing taxes incorrectly), you shouldn’t. What should happen is that the extra income is used to compute your tax rate (but you’re not actually taxed on it).

(So it bumps your tax rate a bit, but only in the same as if the income was sourced in Switzerland)

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To be honest, I don’t know how it is finally used. I know that I need to declare the apartment for sure (e.g. for fortune tax), but maybe I don’t need to declare rental income? Or maybe I should do it, but the software is intelligent enough to see that the property is abroad, so it will take it into consideration only for calculating my tax rate?

I would appreciate if anyone can explain this :). Maybe I’ll know more after I get my first final calculation, which hasn’t happened yet (I’ve sent my first declaration 1.5 years ago (for half of 2018 when I moved to Switzerland)).