Yes it would break the safe harbor rule, but there’s no way this person is qualified as professional investor.
(I assume the 900k are just e.g. RSU or regular investments, not some very active trading¸and there is no drastic increase in wealth through trading, but even then only few cases would get classified as professional).
I’m not sure we’ve yet found anyone on this forum that got classified, and some people do very active trading incl. leveraged strategies.
Yes, this is all assuming no other rule got broken. But technically, NO rules are broken, as the capital gains are not used to replace the income due to full time employment. The employment income is enough to sustain the living. Is that right? The rule is super ambiguous.
Let’s say this scenario:
I find it really weird that it is taxed either at 0% or 45% (marginal income tax rate), and nothing in between, and you have no certainty which it is going to be.
Note that these numbers are hypothetical to better display the point and to have nice round numbers. 
In my view, as long as the situation can be clearly explained and no financial product or financial arrangement has been put in place (i.e. gain solely on the capital gain and upside explosion of the asset in question), I see no risk in being classified as a professional investor.
An example along the same lines: when someone inherits a very large fortune in a direct line, for example, their status does not change. The comparison may not be exact, but the impact of the situation may be the same…
Pretty certain it’s 0%. There’s nothing here that looks like professional behavior.
Exactly - case closed (on this single criterion) by applying common sense.
It can be assumed in all but very extraordinary cases: if capital gains are less than half of the income, they usually are not considered to substitute „normal“ taxable income.
Note that even when capital gains are substituting for other (taxable) income, you still will rarely be considered a professional trader. You may live from proceeds of selling assets without being taxed as a professional trader - exactly as you describe (you sell in one year).
How is the 6 month rule applied when holding securities?
I’m specifically thinking about the following scenario:
I put in 10k into an etf and then dca 1k over the next year, now I want to sell it:
Can I sell all of it without violating the rule?
Can I sell part of it? Like all the shares that I have held for 6 months? IBKR does FIFO right? So i would need to write down how man shares I bought and then only sell as many I have bought 6 months+ ago.
Or do i need to wait 6 months since the last purchase?
Im thinking of a scenario where I buy a big portion of KMLM when I get my bonus and then dca until ear end and then sell it right before the dividend date to get around the US withholding tax (Im still taxed at source, so cant claim it back) and then bu a different fund. KMLMs distributions arent dividends, so no swiss tax avoidence here, just US taxes that I want to avoid in this particular case.
Ideally I would do this every year and switch between two similar funds or something along these lines.
I always wondered about this. Some countries have very specific rules about allocating shares sold for tax purposes. I’m not sure what rules if any exist for CH and whether you are free to choose which shares are sold for tax purposes.
That’s also what Im wondering. If there is no rule preventing me from selling right before the dividend date and I just have to adhere to the 6 month rule(and the other rules of course). Why should I not be allowed to do that?
The tax office can only operate inside the law and not because they feel like Im a tax avoider. Of course I dont want to really let it come to that confrontation…
By “the rule” I assume you mean one of the criteria cited in the 2012 Kreisschreiben about potentially being classified as a professional trader if selling securities held for less than 6 months?
I discussed this as recently as this week with a very seasoned colleague of mine whose father happened to be a tax advisor for many decades.
According to this colleague, the Steuerkommissär looks at the collective of your activities to decide whether this is a self-employed task/activity to generate income. The Steuerkommissär will use the criteria cited but its at their discretion to come to a conclusion from an overall impression.
This colleague also guesses that an occational violation of a criteria will be tolerated as long as it’s not evident that you are trying to create income with a violation … and as long as the Steuerkommissär doesn’t have a bad day. 
This colleague also knows from his father, the tax advisor, that most Steuerkommissäre can be reasoned with.
If still in doubt I would recommend that you talk to the tax authority person handling your taxes (they’re either listed on your previous tax bill or you can call the tax authority and they’ll connect you with “your” person or will give you a direct number.
This person is not the Steuerkommissär but they will be able to give you guidance, and I’m pretty sure if they are in doubt they will doublecheck with an actual Steuerkommissär.
To add a tad of personal experience color: I was audited last year by a Steuerkommisär for my 2022 tax returns.* The Steuerkommissär looked in very much detail at all of my trading activities (trades, dividends, etc) and I know I have violated rule 5 (roughly: “derivatives, especially options, can only be used as hedges of existing positions”) as since 2020 I do Stillhaltergeschäfte (I have sold Puts both to generate income** as well as to buy stakes in companies). I do try to have only a few Puts on my year end statements to fly below the radar, but I have had short Puts that were clearly not for hedging my positions. Despite those evident violations of rule 5, the Steuerkommissär had no complaints about this.
* Most likely triggered as I (truly) forgot to declare an unverteilte Erbschaft of my wife.
** Slightly orthogonal to the question about whether this makes you a professional investor: as I have also learned very recently on a different thread on this forum, by selling Puts I have not generated income, I’ve only made capital gains. Works for me.
Thanks for your thorough answer, really helpful 
I guess it would seem very fishy to them if I would sell increasingly bigger parts yearly, right before the dividend date. But on the othe rhand, it’s not to generate income, money wont leave my brokerage for years to come and will only have inflows…
I think the zurich court used the first in first out rule to interpret the rule. I have not seen a federal court decision on this.
Conveniently I live there 
So that is the minimum you have to adhere then. So selling the 6 month old shares yearly might be a feasible option. have two similar funds, switch all 6 month old shares between them. This would get you like 50% less withholding tax probably. So not all, but more efficient and is inside the rule framework.
My goal would be to not have to go to court about this, so I would try to clarify beforehand with the tax person handling your case, or the Steuerkommissär if things are more complicated.
But thanks for linking the court case.
It’s hard to say, from a distance. My gut feel is that they would glance over this, especially if your “gains” from this only make up a negligible part of your income (basically, if it’s evident this isn’t your main scheme to make a living, i.e. you’re employed and mainly generate income that way).
Of course, I don’t know shit about this, so consult your tax advisor or … simply call the tax authorities up for their opinion on things. I did so on several occations (though not for the same reason as yours). They’re friendly.
I was reading this article (https://www.moneyland.ch/en/stock-market-profits-tax-free) on private investor vs commercial investor status. I was just wondering : let’s assume that, some year, I make transactions that lead to me being classified as “commercial investor”. Is this a then permanent status, or does it apply only to the fiscal period over which the violation of the five rules happened ?
Please search the forum, this topic has been discussed many times. It’s not as simple breaching one of the rules and you suddenly become a professional investor. There are many people here incl. myself that breached one or even multiple rules for qualifying as a professional investor and none of us has been classified as such.
The tax authorities also have an interest in being careful whom they classify as professional, because you can then also claim your losses from your investments.
Sure, I understand this, and fully agree with you. But I’m just genuinely interested in my question: is it a status that is attributed once, or assessed yearly ? I couldn’t find any answer on this.
I doubt there are general rules (will depend on cantons anyway), and if you think you should no longer be treated as pro you can probably request a reassessment
You can give a call to your cantonal tax authorities (but given how hypothetical this is, I doubt it’s worth anyone’s time).
Hi all,
I’m sorry that this question has already been asked a million times, but I feel like I need a bit of reassurance for my particular case… I had around 170 shares of some ETFs sitting in some brokerage account since a couple of years. This January, I bought 5 more shares (175). In the middle of February, I decided to sell it all (175 shares), for a total capital gain of about 30000 CHF (the trade itself is bigger, sold ~90k, but bought for ~60k over time), including ~150 CHF from these 5 shares. Now I’m freaking out that, since I did not hold them for 6 months, this means I fail the first criterion for being classified a private investor, and therefore, I may end-up being classified as a professional investor, hence being taxed quite heavily on these 30000 CHF… or am I just freaking out ? As far as I can tell, I’m in the clear for the four other criteria.
I’m in Vaud, if that matters.
ah, that’s good to read, thanks a lot