I mean in comparison to an Irish (or even US) ETF, they cannot reclaim the Swiss withholding tax.
Are you sure about that? There are these fund classes, but based on the prospect it looks to me as if being an institutional investor (for which 2M or even 0.5M with a financial background is sufficient) is the only requirement for I-X:
There is a “zusätzlicher Steuerrückbehalt USA” of 15% that Swiss brokers need to charge, but that’s a Swiss tax (that the fund should get back if it is even charged to it).
True, for this particular fund it should not really make a WHT tax difference to include Swiss stocks. Not sure why they explicitly exclude it, might be that the target group typically wants a higher home bias and uses dedicated funds for that.
I think CH domicile is very similar to IE domicile for US equities. Both have 15% withholding tax rate. But for some reason finpension says IE is next best thing for US exposure after US domicile. Fund domicile so perhaps there is a catch somewhere.
But the question would be which domicile is better for exposure to non-US and non-CH equities. You might need to check the details on tax treatment for various countries.
International investors don’t prefer CH domicile due to 35% withholding tax and thus they would rather use IE domicile. But this should not impact Swiss residents as it is completely recoverable.
A Swiss mutual fund is not a Swiss resident according to the tax treaty, as I understand it. There is a reason why the popular funds with US stocks are domiciled in Ireland. The US tax treaties with most European countries do not have the reduced 15% WHT for funds (even though 15% is very common for residents), as far as I know. That said, I don’t know the details off the top of my head. (Another reason is that Ireland doesn’t have L2WHT of its own for funds but that would also apply e.g. to funds domiciled in Luxembourg).
Very bad idea. Swiss Index Funds have a double WHT Tax drag vs. IE ETF. On one hand, they are Index Funds but not ETF (which e.g. in IE already implies tax drag) and they are domiciled in Switzerland. The situation is a bit better with LU or IE Index Funds, but still a bad idea.
Swiss Index Funds however make loads of sense for both Swiss and European Shares. There, they beat both Swiss and IE ETF. So you need to split the world I am afraid
„…the double taxation treaty Ireland enjoys with the US, which reduces the withholding tax on US dividends to 15 percent from 30 percent. Ireland is the only European jurisdiction to hold such an arrangement for ETFs, and given global investor interest in US assets, this is a valuable concession“
Yes (my initial reaction as well above). On the other hand, why have a non treaty-rate of 30% (on products such as VT), when anyone can buy an Irish ETF instead and only 15% apply - that „circumvents“ it? Hiding assets abroad used to beca thing, not too long ago.
It probably has got to do with what qualifies as a resident person eligible for refund of WHT (is a fund a resident person, when it just „passes through“ dividends to its investors?) to the U.S. and its IRS.
Thanks for the reference. I noticed that lot of ETFs from Swiss funds are now domiciled in IE. probably due to this reason. However I was under impression that Funds are different than ETFs.
But if funds also cannot reclaim taxes and need to have 30% irrecoverable WHT loss, then this is quite some disadvantage for Swiss domicile.
By reading and partipating to this forum, you confirm you have read and agree with the disclaimer presented on http://www.mustachianpost.com/
En lisant et participant à ce forum, tu confirmes avoir lu et être d'accord avec l'avis de dégagement de responsabilité présenté sur http://www.mustachianpost.com/fr/
Durch das Lesen und die Teilnahme an diesem Forum bestätigst du, dass du den auf http://www.mustachianpost.com/de/ dargestellten Haftungsausschluss gelesen hast und damit einverstanden bist.
