Investing & quellensteuer

Hi everyone, first time poster here so first and foremost I wanted to say thanks for the fantastic resource. It has been a great help in allowing me to gather information to start investing.
I am resident in Switzerland and have decided to open an IB account and start investing in ETFs. However, I am still a little confused about taxation. I have read the relevant tax threads on here, but a lot of information seems relevant for people doing their own tax return.
I am taxed at source rather than filing a tax return. Does anyone have further information on how investment taxation works when one pays quellensteuer?

I was in the same situation. What I did in the “neuveranlagung” (you have time until end of March to do it…) is to list the dividend income as other incomes, and mention in the comment the amount of source tax you already paid on it. If you are lucky, they reflect it. Of course, provide the according dividend & WhTax Report (IB is fantastic here)

if your dividends are >2500CHF, you have to do the standard tax filing as with C permit

…probably differing from canton to canton?

You used to be able to fill out a short form for 3rd pillar contributions, educational expenses, child care expenses and a couple other things to get tax back. You essentially didn’t need to do anything regarding dividend income or wealth tax unless it was significant (never looked into the details). This has ended as of the 2021 tax year (I.e. Your return next year) and you now need to do a full tax return to calculate the difference between what was paid and what you should pay… But doing this is at your discretion in many cases.

ah, that is possible. i didnt check it.

Yes, a lot of things are changing in the 2021 tax year and some of our knowledge up to 2020 does not apply any more for taxation at source (3a pillar, taxation beyond threshold, etc).

The best would be to look at the website of the tax office. It is important to understand what is mandatory, optional or not possible. And also to understand what is irreversible.

Similar question on my end. Living in the city of Zurich on a B permit and hence taxed at source. For last year I filed the Neuveranlagung and I have decided to neglect my Pillar 3a from now on as it would most likely result in a malus after filing a full tax declaration. My question now is, do I need to do it anyhow as the dividends I receive on my IB account are only taxed by the US (automatically that is I take it?) but the Swiss tax authorities are unaware of my portfolio even existing. So it would constitute tax fraud not declaring it?

Thanks a million

You have to declare if:

your taxable income which is not subject to taxation at source (e.g. income from securities or real estate) amounts to at least CHF 3’000 or/and the taxable assets amount to at least CHF 80’000 (for individuals), respectively to CHF 160’000 (for jointly taxable persons)

I have heard that if you are taxed at source (quellensteuer) and then you have a small amount of dividends and have to do a full tax declaration, you might end up paying more in taxes than what you are earning with the dividends!!! Is this right?

I think it is because tax calculation for Quellensteuer are fairly generous.

It is crazy anyway. So you want to gain some money and you might end up paying more. It discourages investment.

Very possible.

The law is generally designed that you do not have a choice whether to file or not (irrespective of actual enforcement). And it’s only a temporary relief in filing a proper tax return.

It’s not intended as a long-term discrimination between citizens and non-citizens.

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