Professional trader vs stamp duty

Hy Mustachians!,

This is my first post, so I hope I don’t violate any FAQ. I found this forum thanks to Mr Rip, I’m reading but I can’t find an answer to my question which is:

if I quit and my income comes only from active trading am I considered a professional trader? And if I am a professional trader who trading with CT (or another Swiss Bank), do I also have to pay stamp duty on transactions in addition to income tax?

It is important for me to know this, because I’ll do about 1 trade a week and the stamp duty would be too expensive, I know I can choose IB but I prefer a Swiss solution.

Thanks everyone for the replies

This is a 100 000 CHF question that no one here can answer definitely.

Normally if you trade via a Swiss broker, you have to pay stamp duty. If they can be deducted as expenses is another excellent question that no one here can answer definitely.

That doesn’t sound very professional fwiw.

Thanks for the reply all, I worked in Switzerland from 2008 to 2015, then I returned to Italy where I managed my assets with investments and now I would like to return to Switzerland but for a trader it is impossible with the stamp duty to have a Swiss account. I should have accounts abroad but I am sorry to lose Swiss banking security

If returns on investments make up all or most of your income AND you trade frequently, it is pretty much a given that you will be classified as a professional investor.

The primary factor is whether returns make a the bulk of your income, but if you only place a few trades a year, the chance of being classified as a professional investor is lower.

With regards to stamp duties, all Swiss banks have to levy them, regardless of your status as an investor. The only way to not pay them is to use a foreign broker.

As private investor they definitely can’t be deducted as they are transaction costs. Even explicitly listed here as Umsatzabgaben: Weisung des kantonalen Steueramtes über die Abzugsfähigkeit der Kosten für die Verwaltung von Wertschriften des Privatvermögens | Kanton Zürich

As professional investor it would make sense to be able to deduct them as expenses. However, I don’t know whether that is actually accepted or not.

1 Like

This official Swiss site says they are also exempt: trades for the trading book of a professional securities trader.
But I don’t understand what it means.

For such situation, I would rather get in touch with a Swiss tax advisor. You’ll pay but you’ll get precise answers to your questions and avoid bad surprises later one.

A free forum and its community have limits on complex questions :slight_smile:

Thanks for the reply, but I don’t think it’s a complicated situation, is it possible that there is no professional frequent trader in all of Switzerland? :slight_smile:

Whenever people start talking here about the professional trader status, it is how to not have it assigned. I don’t really understand about your goal, do you want to avoid this status or you want to receive it?

And as a retail trader, just use a foreign broker, I don’t think there’s a stamp duty?

I would like to be classified as a professional trader, pay taxes on the income I make and above all not pay stamp duty

@nabalzbhf
Currently, according to the Federal Tax Administration, the following are not subject to the trading tax (stamp duty):

foreign banks or brokers as counterparty;

I don’t think so, in life there are traders and investors, and many traders I know are profitable by doing even 1 trade a day, but this is something else

Unless you use a foreign broker you won’t. Investors exempted from Swiss stamp duty are strictly limited as per art. 17a LT

What do you plan to trade ? derivatives ? they are exemptend for stamp duty by default.

Do that through a company? Seems like the safest way to professionally trade.

Out of curiosity, do you want to be considered professional to benefit from deduction on losses during bad years? If so the tax authority are very much aware and that’s one of the reason why it’s hard to be classified as pro trader (there’s even court cases where people sued to be classified, and the tax authority won, the fact they weren’t making consistent profit was part of the decision).

Having bad years is part of every trader’s history and it’s impossible to avoid it, for example this year I’m down 20% but on average I’m in profit since I started trading.

Nobody wants to lose and not pay taxes and everyone wants to earn and pay taxes, especially if it’s the only source of income you have, so I don’t understand the usefulness of hoping not to pay taxes especially if it’s the only source of earnings.
If I had other income I could also understand it, because it would not be the main job

Does having a company exempt me from paying stamp duty?

no [twenty characters ]

1 Like