Luxembourg withholding tax

Taxes
1

In this article under “Scenario 6: a Swiss buys an ETF domiciled in Luxembourg”, it is explained that if I hold a share of an ETF domiciled in Luxembourg, 15% of the dividends will be withhold as tax, which can be reclaimed using the DA-1 form. I looked at the tax treaty myself and it looks correct to me that 15% should be withheld. However, I’m a resident in Switzerland and I held such shares in a Swiss brokerage account, as well as some in a foreign bank account and both of them payed the full dividend out to me without 15% withholding.

Any idea why they might be doing this? Am I misunderstanding something?

2

“Ausschüttungen von Fonds mit Domizil Luxemburg oder Irland sind im Gegensatz zu Schweizer Fonds von Quellensteuerabzügen befreit” (here).

“Not subject to withholding tax” (and here)

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3

From the second link I see that dividend payouts by funds are not subject to withholding tax in general, independent of the residence of the recipient. I guess the withholding tax mentioned in the tax treaty only applies to regular companies.

That explains it, thanks for your help.

4

My situation is similar, but still I am a bit confused:

I have ETFs domiciled in Ireland, Luxembourg and Germany and the brokers are in Germany. I am correctly registered as “Steuerausländer”.

I now checked some dividend payments (most my funds are accumulating) but I never saw any indication of withholding taxes.

Can this be correct? Or does this whole business of DA-1 and tax refund relates to the taxes paid by the companies in the first place (income tax or Körperschaftsteuer). This would explain why I do not see the taxes on my bills.

Thanks for any clarification.

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5

There are no level 2 withholding taxes, that means deducted from dividends paid by a fund to investors, for private investors investing in Ireland and Luxembourg domiciled funds.

6

Thanks - that means I do not have any business with reclaming at all!

7

To the contrary, DA-1 pertains to tax withheld when a company or find makes distributions to you.

Yes - though may have in declaring income from accumulating funds (unless listed in ICTax).

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8

How about L1WT for Europe-aimed ETFs like Stoxx600? Is one country preferable than the other from tax perspective for Swiss taxpayers?

For example a Swiss investor buying Lyxor core stoxx europe 600 in Luxembourg vs. iShares core msci Europe in Ireland?

9

I don’t know.

When I was digging data on L1 tax, I saw that Luxembourg based ETFs do not report gross dividends received and L1 taxes withheld separately, but report net dividend received.

Ireland or Luxembourg should not be much different for European stocks, though.