I have around ~$25k (return of debts + wedding gifts) and ~€15k (personal car sale back in home country) in cash. I haven’t declared this so not sure how to go about it (although the return of debts part + maybe the car sale comes indirectly from my previous salaries but outside of CH so could hypothetically be tracked).
I really don’t like the idea of sitting on so much cash and would like to transfer them to my broker to buy more ETFs (although almost everything seems to be at their 52 weeks high so not sure if this is the best idea).
What would be the best way to do it and:
not raise any suspicion / trigger any tax authority checks
not lose much value because the cash is not in CHF and my broker takes CHF and my ETFs are in either USD or EUR so this seems like I’ll have to be converting the currencies twice!
I realize that this might not be a lot of money to some but these two things still worry me a lot so any advice is really appreciated!
check out the wort market timer ever and how he still makes money on the long term and also
I am not goint to give advice on how to circumvent due taxes (where this is not a claim there would be, idk). Still I know IB allows you to send funds from wherever you register a bank account and validate with them.
For the tax authority you have to be careful because there is automatic exchange of information nowadays with the EU countries so may be the taxman already knows about it.
You can use the money slowly without making it visible in Switzerland (through a credit card for example).
You can make it appear in Switzerland in one go and explain the truth (sold a car and wedding gift) which is nothing illegal as long as it happened recently. Maybe this last explanation will make the tax authorities a bit more cautious about your declaration but there is nothing to say.
What I would avoid above all is to leave the situation unclear over many years.
For the investment, well, stock market have a tendency to climb and we invest for that reason as well.
You can pay all your bills in cash at the Post. For exemple, pay your insurance bill for the whole year
If you go at the end of the month in a post office, it’s crazy the number of people who pay insurances, electricity, ect in cash.
But first, you will need to exchange the money in a change office
Just declare it on your next tax statement and don’t loose your sleep about 50 CHF in due taxes. Nobody will really care for such a minuscule amount.
Use a currency broker, such as Currencyfair (PM me if you need a referral code, you’ll get 30 EUR bonus) to move your funds to Switzerland. Or open an account at IB and never worry about bad exchange rates at your Swiss broker ever again.
An Auslaender walks into a Swiss bank with a large briefcase in each hand. He approaches the counter, brings his face close to the glass and whispers, “I have two million dollars with me. I urgently need to open a secret Swiss bank account!”
The attendant replies in a normal volume, “Sir, there’s no need to whisper. You don’t need to be ashamed of being poor in Switzerland.”
25k return of debts + wedding gifts:
a) Interests on the debt are income tax liable, principal is not. In principle if this transaction occurred in a foreign country you need to declare your taxes there. You can also declare the transaction in Switzerland (only the interest received and the taxe paid in a foreign country if you are not tax resident in that country). In those cases the country were you are not tax resident apply a Verrechnungsteuer which you can then claim back through the Swiss tax declaration. This would be the complicated most correct way. However, you can also declare the total value (principal plus interest) as a interest free loan which you got paid back - this will come as a value in your account which you can explain in a letter to the tax authorities as being a loan principal without interest you received back from your home country.This is to explain the wealth increase.
b) Wedding Gift: As oozoo explained gifts are in some cases tax free, mainly if they come from your parents. Other relatives or unrelated (friends) are most of the time not exempt. You can check the guidelines of your Kanton and see if you can declare the amounts without incurring much taxes
Car sale: officially you need to have declared your car as asset in your tax declaration (Motorfahrzeug Ziffer 30.4 in the ZH tax). If you sell it in Switzerland and make a profit compared to the declared value then this profit is tax liable. If you did not declare your car and sold it in a foreign country you probably need to declare any profit in that country similarly to the loan interest in 1. a) above.
In general, my opinion is you try to declare the complete amount as gifts, check who the gifts can come from and think about splitting the amounts in 2 tax years if needed. Meanwhile park the amount somewhere and do not do this again because it is sort of illegal (can be tax evasion).
Regarding bank accounts, you can open EUR & USD accounts in many Swiss banks, for example Swissquote.
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